Health and Social Care (Community Health and Standards) Bill

Lord Warner: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
	Moved, That the House do now again resolve itself into Committee.—(Lord Warner.)

On Question, Motion agreed to.
	House in Committee accordingly.
	[The CHAIRMAN OF COMMITTEES in the Chair.]
	Clause 18 [General powers]:

Earl Howe: moved Amendment No. 182:
	Page 8, line 26, at end insert—
	"( ) An NHS foundation trust shall have the power to pay remuneration and allowances to any person without reference to future national agreements on pay negotiated by the NHS."

Earl Howe: In moving Amendment No. 15, I am conscious that I am bringing us on to some controversial territory. The question it asks is simple: to what extent should foundation trusts be free to set their own pay and conditions for the staff they employ?
	I am, by instinct and conviction, against the idea of trying to impose artificial prescriptions from the centre on an organisation of the size and diversity of the NHS. As far as I can judge from their pronouncements, government Ministers have embraced that view, too, in broad terms, although perhaps not universally. Therefore, direction from the centre, especially when the Bill before us purports to set the NHS free, should be looked upon critically and the assumptions underpinning it should be tested rigorously before it is retained as a feature of the new NHS.
	Yet the idea that foundation trusts should not be bound by national pay agreements is one that was described by the Minister in another place as "preposterous", "absurd", "ridiculous", and to be treated with "complete derision". Colourful phrases such as those make me think straightaway that we are dealing here with more of a shibboleth than anything else because those words do not constitute a decent argument.
	We already live in a competitive market for healthcare staff. The private sector, including agencies, compete with the NHS not just on the basis of pay rates, but also in terms of working conditions. Those who seek to cap the ability of foundation trusts to set their own pay rates point to the danger of predatory behaviour by those trusts which would disadvantage the rest of the health economy in the locality. I do not buy those arguments and I will explain why.
	We all know that local labour markets in the South of England are different from those in the North. Recruitment and retention of healthcare staff in the South is hampered by the profusion of alternative jobs in other sectors, many less skilled and many better paid. Housing costs in the South are much higher than they are in the North. These disparities have been recognised by the Government in Agenda for Change. They were recognised by the Chancellor in the last Budget debate. There is no argument that local labour markets demand different responses and different rates of pay if we are to deal with the realities of life.
	Agenda for Change contains much that is welcome relating to pay flexibilities. Potentially, there is flexibility amounting to 30 per cent in pay rates, which doubtless managers in foundation trusts would be free to use if they judged it to be necessary. Nevertheless, 30 per cent is an artificial cap and a cap which is not necessarily appropriate to the realities of the market, any more than previous formulas were. Under Agenda for Change, it is still necessary for the Government or the regulator to say to a hospital manager that he may not, for any reason at all, stray outside the prescribed formula, no matter how good a case he can present. That is unjustifiable.
	I maintain that, in practice, there will be little to incentivise managers to stray outside the bounds of nationally negotiated pay agreements. Predatory behaviour by foundation trusts against other NHS bodies will be curbed by two principal restraints: the national tariff and the duty to co-operate under Clause 29 of the Bill. The national tariff will, in practice, limit what trusts are able to pay their staff. There can be no question of an unbridled bonanza of pay rises in foundation trusts.
	However, in the event that the local health economy looks like being destabilised by pay differentials, the regulator has power to act. But I do not believe that that will happen. The private sector is already free to attract staff away from the NHS, and it frequently succeeds. But it does so not by offering higher hourly pay rates but rather by holding out the promise of a better working environment, more user-friendly hours and better staffing ratios. Anyone who is afraid of predatory behaviour by foundation trusts needs look only at that precedent, which tells us that pay freedoms are not simply about the hourly rate of pay.
	I do not expect to receive many warm words from the Minister in response to the amendment. However, I hope that I will receive an answer that is not dismissive. If he disagrees with the extension of freedoms to foundation trusts, with respect, he needs to tell the Committee why. I beg to move.

Lord Clement-Jones: I suspect this is one of those areas of the Bill where noble Lords on these Benches part company with the noble Earl, Lord Howe, in his search for even greater flexibility than the Minister has proposed. That has been the watchword of most of his responses in the course of the Bill.
	The Minister dealt with the issue on the third day of Committee, when he said:
	"As the noble Lord acknowledged, first, NHS foundation trusts will implement the new Agenda for Change pay system. The Secretary of State will not support applications from NHS trusts without a clear commitment to implement Agenda for Change. Under the new pay system, NHS foundation trusts will be specifically represented in forums for national collective bargaining on staff terms and conditions of service".—[Official Report, 13/10/03; col. 628.]
	I welcome that statement.
	However, we are concerned not only about the past and the present but also about the future. One of the key concerns of many of those who have reservations about foundation trusts is their potential impact, and their ability to offer better terms and conditions, on the local health economy in their areas.
	That is one key issue that has not yet been fully addressed in terms of the future. I believe that the amendment of the noble Earl, Lord Howe, nicely teases that out and I hope that, in a sense, mine does, too, in terms of what the Minister and his colleagues propose for the future. As I read it, the Bill is silent on that subject. It is a question of whether or not foundation hospitals take part in future bargaining and negotiations. I believe that, as yet, that question remains unresolved.
	From the way that the Minister responded on the subject of the regulator and his powers—he said that it was not the job of the regulator to consider that side of things—it is not clear whether the regulator will have the power to insist that foundation hospitals join, in a coherent manner, the national pay bargaining negotiations or whether he will be comfortable if each foundation hospital conducts its own negotiations, paying well outside the flexibility of Agenda for Change in future. What will make Agenda for Change last for the future? The answer to that is not clear at all. I believe that a number of unresolved questions of great importance derive from both amendments.

Baroness Finlay of Llandaff: I declared my views by adding my name to Amendment No. 185. In these two amendments, which appear to go in opposite directions, we are being asked to look into the future and speculate as to what might happen. We have already expressed concern about destabilisation of local health economies and about staff moving from one trust to another.
	A duty of co-operation is set out on the face of the Bill, but I do not know how far one will have to be non-co-operative—that is, how many staff will have to move from one trust to another—to demonstrate that one really is poaching staff and destabilising the local health economy in staffing areas. We are already well aware of staffing problems in some parts of the UK. It would be incredibly easy for a foundation trust, freed of any rigours in relation to pay negotiations, to drive up the price per hour or people's salaries and drain local trusts of staff.
	Agenda for Change is being introduced and it has been welcomed by the professions. I believe that even that will be difficult to regulate, if I may use that word, although it will not come directly under the terms of the regulator. Job descriptions can be subtly rewritten and a little more responsibility added so that, within a foundation trust, staff may do almost the same job but have a few more responsibilities and thereby move to a higher pay bracket.
	Terms and conditions certainly need to be improved, but I have to disagree with the noble Earl, Lord Howe. When staff move, they do so for pay increases on an hourly rate. It is true that they also move for better conditions. I am aware of trusts which have very good staff relationships but, sadly, they will lose staff to another organisation where the hourly rate of pay is higher. There is a huge need for staff to have creche facilities and similar support organisations within the trusts in which they work. I do not see anything in the Bill to stop trusts doing that. However, I shall be gravely concerned if they are allowed to determine their own rates per hour. Therefore, I firmly support Amendment No. 185.

Baroness Carnegy of Lour: The noble Baroness has expressed very clearly the view that I imagine would pertain in very large parts of the health service. That is entirely natural because it is the culture in which National Health Service employees have lived over many years.
	At the same time, if one stands back a little from the health service, one sees that one problem involved in running 1 million people from the centre is that of national wage negotiations. That poses a big problem for the health service because of the different costs in different parts of the country and the fact that people are far better off in one part compared with another and that therefore, as my noble friend Lord Howe said, money is being paid unnecessarily to some or too little is being paid to others. That causes a great economic difficulty for the health service.
	As can be seen from the record of industries that have moved into the private sector, an extraordinary difference occurs when national pay bargaining comes to an end. However, that subject is for another day because we are discussing only foundation hospitals.
	Frankly, foundation hospitals are not going to be free at all. They will suffer from a combination of the barnacles that will be attached to what could be a very good ship by the governance arrangements, which we have already discussed, and the difficulties caused by bringing in politics and imposing national pay bargaining. Because foundation hospitals are not being allowed to negotiate their own arrangements, it will not be possible to use the money that they generate through greater efficiency to improve the pay and conditions of staff, which is what they should be able to do. It will not be possible for them to influence nearby hospitals with regard to improving their standards. As I believe the noble Baroness said, the only way that it will be possible to improve the pay and conditions of staff will be to alter their jobs so that they are promoted and do something extra. That is the present situation, and that hampers everything.
	It is extremely unwise of the Government to prevent foundation hospitals being free. The whole idea will falter on that. Originally, I thought that my party's opposition to foundation hospitals was wrong, but the more I look at the Bill the more I realise that it cannot work. This is one of the main obstacles. I feel very strongly about this. The Liberal Democrats and the Government are 100 per cent wrong. I support the amendment.

Lord Warner: It is clear from this debate, and will become even clearer after I have spoken, that the Government are positioned very neatly between the noble Lord, Lord Clement-Jones, and the noble Earl, Lord Howe. I have to say that I feel pretty comfortable in that particular position.
	However, I reassure the noble Earl that I would not dismiss with derision the points he makes. Certainly, we agree that NHS foundation trusts should have a degree of flexibility when it comes to staff pay and conditions; indeed, just as NHS trusts do now. Noble Lords probably will be impressed by the kind of practical issues raised by the noble Baroness, Lady Finlay. Those are important considerations.
	With the state of my voice, I shall not engage in the kind of ringing phrases used by my noble friend in another place. I should like to set out what I think is pretty convincing architecture which the Government have put in place through the Bill and its policy approach. It is worth reminding the Committee that Ministers are not now involved in pay negotiations. They cannot unilaterally amend the results of those negotiations between employers and employees or introduce new ones. It is our belief that employment contracts are a matter for staff, unions and employers, not for third parties. We start from that position.
	However, it is essential—we have said this on a number of occasions; no doubt I shall be accused by one or two noble Lords of having a mantra on this—that foundation trusts act in ways that are consistent with equal pay principles and do not prejudice the interests of the wider NHS, including NHS employers. As I said on an earlier amendment, a "beggar your neighbour" policy among NHS bodies serves no one's interest. The danger with the amendment tabled by the noble Earl is that it could encourage people along that particular path.
	The balance between freedom for staff, unions and employers to negotiate what is right for them, flexibility for NHS foundation trusts and looking after the interests of the wider NHS is precisely what we are achieving in the current arrangements that will apply to NHS foundation trusts. We have struck that balance. The issue of balance arises in different guises in the Bill.
	As I said earlier, NHS foundation trusts will implement the new Agenda for Change pay system. Again, to repeat what was said earlier, the Secretary of State simply will not support applications from NHS trusts without a commitment to implement Agenda for Change. Under the new pay system, foundation trusts will be specifically represented in forums for national collective bargaining on staff terms and conditions. That will be a contractual right for all Agenda for Change staff so that they will be part of that negotiating process. They are not excluded from that negotiating process. They are not, in effect, outside it—that is to say, being told the results and having to lump it. They are part of the process of settling the terms under Agenda for Change. Because there are alternative means for enabling foundation trusts to sign up to Agenda for Change, there is no need, as the noble Lord, Lord Clement-Jones, suggested, to make legislative provision for this in the Bill. Perhaps I may say to the noble Lord, as an aside, that it is quite inappropriate to include a reference to Agenda for Change in legislation as it is a term based on the outcome of a nationally negotiated agreement between the employers and unions and not a statutory body or scheme in the sense that is usually used in a Bill.
	Turning to the detail of Amendment No. 182, I do not know whether I shall reassure the noble Earl, but I shall try. We believe that it is not right to suggest that a foundation trust should or would want to have a right in statute to ignore future pay agreements when the vast majority of the staff will be employed on terms negotiated under such contracts as would be the case if we were to take the amendment at its face value. The noble Baroness, Lady Finlay, made an important point about the fact that NHS employers have many staff who do not stay in one place for their whole careers. They move around and there are some issues concerning their ability to have some sort of framework as points of reference, which Agenda for Change produces.
	As I said, these national negotiations are a matter for employers and unions and not the Secretary of State. I emphasise again that it is also not for the independent regulator to interfere. Negotiations are not matters in which either the Secretary of State or the regulator should be involved. In concluding on why we do not think the amendment is appropriate, I should point out that we have had a number of discussions about partnership working. That is why NHS foundation trusts will be subject to the same statutory duty of partnership that applies to all NHS bodies—a duty to co-operate in the exercise of their functions.
	In our view an amendment such as Amendment No. 182 would cut across that partnership approach and having to have regard to a wider NHS interest. For those reasons and some of the other reasons I have suggested, we believe that it is inappropriate.

Lord Clement-Jones: Although the Minister has just displayed admirable consistency with his previous response on Monday, I want to put on record that noble Lords on these Benches do not believe that it is wholly satisfactory. I well understand his unwillingness to include in the Bill references to Agenda for Change. That is simply a device to debate this issue once more. However, what is particularly troubling is the fact that the regulator will have no place in this process at all. I can well understand wishing to keep this as a matter between unions and employers, but to have no regulatory mechanism at all in these circumstances bodes very badly for foundation trusts. That is the root of many objections to foundation trusts, particularly on the staff side. No doubt we shall return to this issue.

Earl Howe: Once the Secretary of State has given approval for a foundation trust to be authorised on the condition that that trust signs up to Agenda for Change—quite obviously, in the light of what the Minister said—what would happen if the regulator did not see eye to eye with that point of view, was ambivalent about Agenda for Change and the foundation trust then decided that it did not want to have anything to do with it? Would the regulator be obliged to make Agenda for Change a condition of the licence in the light of the Secretary of State's point of view, or is the regulator free to say that he has no views on the matter?

Lord Warner: It is not for me to second guess the regulator who no doubt would want to take account of the Secretary of State's position in approving a particular applicant for foundation trust status. It would be a matter of public record that that was the Secretary of State's position and that that was the condition on which he had approved a particular application to go forward to the regulator in that sense.
	The regulator would have to make his own judgments either before he had considered giving authorisation or after if, indeed, the behaviour had changed from that which was expected at the time he had given it. Both circumstances could apply. The regulator would need to consider whether in subsequent behaviour by a foundation trust there had been a significant breach of the conditions under which he had given the authorisation. The noble Earl and I could debate the issue all day, but none of us is clever enough to think of the myriad of circumstances under which that might happen.
	The regulator would then make a judgment about whether he wanted more information from a foundation trust, or whether ultimately he thought that the trust's collective behaviour had been so significantly different from that suggested in its application for foundation trust status that he had to take some appropriate action. I repeat that the duty of partnership is there and would be an important issue if there was a gross change of behaviour by a foundation trust after an authorisation had been given.
	I have done my best to try to clarify matters for the noble Earl.

Earl Howe: I am most grateful to the Minister. I agree with him about the duty of partnership. That is in the Bill for a purpose and I share the noble Lord's interpretation of that purpose.
	The fact remains that if the regulator is of a free market disposition and is indeed an independent entity then it does not really matter what the Secretary of State believes in these situations. If a foundation trust were to break away from Agenda for Change, and provided it did not destabilise the local health economy, I should not have thought that the regulator could object too much. So I think that we are entering some very interesting territory. I shall read very carefully what the Minister has said on the issue.
	However, it seems to me that my noble friend Lady Carnegy was absolutely right—and I must disagree with the noble Baroness, Lady Finlay, for whom I have an enormous amount of respect and time—that a beggar my neighbour approach and driving up the cost of healthcare is not actually what happens in the healthcare economy. Yes, sometimes people leave hospitals because they will get a little more money, but it does not happen on a great scale. If the noble Baroness really fears that this will happen, then logically she should be against Agenda for Change, because that presents the same kind of opportunities for pay rises in the NHS.
	The NHS cannot exist outside the whole economy. If we are going to have foundation trusts that are truly free to assume responsibility for themselves, their patients and for their local communities, there should be no place for a straitjacket of national pay agreements that does not take account of the realities of the local market place. If, in urgent individual cases, a manager judges that he can justify paying more than the maximum limit laid down by Agenda for Change in order, for example, to prevent a serious staffing shortage, he should be able to do so.
	We can learn these lessons from Spain and Sweden where pay freedoms have been allowed with the result that productivity and morale have prospered without detriment to the rest of the health economy.
	I am most grateful to all noble Lords who have taken part, whether or not they have agreed with me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe: moved Amendment No. 183:
	Page 8, line 26, at end insert—
	"( ) An NHS foundation trust shall have power to procure information technology systems subject only to compliance with such interoperability standards as may be specified in regulations."

Earl Howe: I have just mentioned the experience of Sweden and Spain in pioneering the foundation trust model.
	Alongside pay freedoms, the other lesson from those countries is the lesson of IT. On IT procurement the Government have returned to their age-old instincts: the IT contract for the NHS has been centrally drawn up and is being centrally managed. It will account for a vast sum of public expenditure. Recently, we understand, it has entered somewhat choppy waters. Why? Because the Government in their usual fashion have tried to impose too many risks and liabilities on the contractors, with the result that all but one of the three main bidders have walked away. The Government appear to be forcing an unrealistic pace on those contractors and it is said that the unprecedentedly tight deadlines have frightened off other bidders. Smaller suppliers on which the NHS depends are being squeezed out and if we are not very careful some may go to the wall. None of that has apparently deterred Ministers from pursuing their centralist policy. The NHS is to have the IT system that Ministers think is best for it.
	Foundation trusts in Spain will say that one of the freedoms that has made the most difference to them is the freedom to procure their own IT. The only requirement imposed on them is interoperability with systems elsewhere. I must ask: why have the Government not looked more carefully at that model and drawn the lessons from it? I do not know what evidence the Government have for thinking that a giant, centrally managed government contract is likely to prove successful. The history of large national IT procurements in other departments is not exactly reassuring.
	The NHS contract is immensely complex. Its broad specifications run to 550 pages without all the detailed technical requirements that one has to build in. Last year the DoH acknowledged openly, and I thought refreshingly, that there were "significant risks"—its words not mine—attached to the IT programme. Indeed, that is right.
	So the Government have hang-ups about granting greater freedoms to foundation trusts as regards IT. I believe that that is a totally and unnecessary restriction. I really should like to hear the Minister's explanation. I beg to move.

Lord Warner: I hear what the noble Earl says about the IT strategy. I do not think that this is the place to have a long detailed debate about the Government's IT strategy. I shall try to deal with the amendment by relating why it is not compatible with the IT strategy.
	I do not disagree with some of the thinking outlined by the noble Earl. It is worth bearing in mind that the regulator will have powers under Clause 6(3) to require that NHS foundation trusts comply with IT interoperability requirements to ensure that there is data integrity across the NHS.
	I do not think that anyone in the Committee would disagree with the proposition—we have all learnt by mistakes made by successive governments regarding public procurement of IT—that there needs to be some common architecture for IT to operate successfully and for local systems to be able to transfer information from one part of the country to another. One of the uncomfortable facts of life for the NHS is that people move around and that records and information about them may need to move around. So a common architecture to ensure compatibility between local systems is an important aspect. Nothing in this legislation prevents the regulator ensuring that. There are many stand-alone systems that presumably are bespoke to a particular function in an office which do not come into that category.
	PCTs may also include requirements on interoperability in their contracts with NHS foundation trusts. Let us stop and think about the issue. It is not in the interests of NHS foundation trusts to do other than ensure integrity and compatibility of NHS data flows and value for money in their own IT solutions. Why would they want to buy systems that are unable to relate to other parts of the NHS?
	In the light of these considerations, we believe that the regulation-making powers proposed in the amendment are superfluous and would seem on face value to reduce NHS foundation trusts' independence from the Secretary of State, a matter about which the noble Earl and his colleagues have been so concerned. So the safeguards are there, without being oppressive where there are particular local systems that do not have linkages to other parts of the NHS.

Baroness Carnegy of Lour: The Minister said that he did not think that the amendment is good enough because it limits foundation trusts unnecessarily. The Government are missing an enormous opportunity to find out how IT could operate within a common architecture—which there must obviously be because, as the Minister says, people move about, statistics will be required and all the rest of it. The systems must be interchangeable, but surely foundation trusts might find new ways that would avoid the massive problem of one great system, which is what the Government are trying to operate with.
	It is yet another missed opportunity—as is the pay bargaining arrangement, although this is of course on a much smaller scale—to discover how better ways could be found by foundation trusts. They could experiment and pioneer new ways, but that is being prevented by the arrangements. My noble friend's wording may not be ideal, but surely the Government should accept this one and let trusts see whether they can find ways—within the requirements of the Bill, of course—to improve the working of their IT. The Government are being remarkably narrow minded on the issue.

Lord Warner: I do not want to go through the detail, but this House and the other place have umpteen times debated the problems of local initiatives in IT because, with the best of intentions—not just in the health service but across the public service—people have taken projects forward to a point where it subsequently becomes inevitable that they cannot inter-relate to other parts of the public service. We have only to consider the criminal justice system, to cite another example from outside the NHS where that is a problem.
	We are trying to strike the right balance, which we think we have done, in enabling a common architecture. That is a rather grand phrase, but local initiatives often—because, for good reason, they are designed around local needs—do not necessarily meet the needs of a wider agenda and cause problems for inter-relation with other systems. I ask the noble Baroness to reflect on that: it is not as though we do not have a lot of experience of that going wrong. We must ensure that the national frameworks are right. That is in the best interest of people locally.

Earl Howe: I am again grateful to my noble friend for her support. We must ask which approach carries the greater risk: the Government's approach—which, by their admission and in my estimation as a non-IT specialist, carries considerable risk; or the approach floated in my amendment, which I advocate, under which foundation trusts should have a measure of freedom to procure and commission a system that suits their needs. The Minister and I agree that there must be interoperability and compatibility. That is not in dispute. Clearly, different parts of the NHS must speak to each other through their IT systems. But the Minister has not made the case for imposing a giant national system on the NHS.

Baroness Howarth of Breckland: May I intervene on two counts? Having been involved in at least four government computer systems, the real difficulties have been in gathering comparable information across large areas. When local projects develop programs, interface—what the noble Earl calls interoperability—is not always as easy to achieve in this fast developing technological world as one would hope.
	However, I must tell the Minister that we would all feel much more comfortable with the debate if he had not rather firmly put us in our place by ruling out the big debate about the strategy for development of government IT and had been more forthcoming with information. The National Care Standards Commission and the Food Standards Agency—I declare an interest in both as a member of the boards—have had difficulties with their systems. On the other hand, it would be a real mistake not to have a system that can produce information because of the problems with small project-based systems.

Earl Howe: I take due note of what the noble Baroness has said from her experience. I am sure that her first point is extremely pertinent.
	I do not intend to prolong the debate, but I share the disappointment expressed by the noble Baroness that the Minister could not have taken us more into his confidence on the Government's thinking on IT contracts. Nevertheless, we have had a useful exchange of views, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe: moved Amendment No. 184:
	Page 8, line 26, at end insert—
	"( ) An NHS foundation trust shall not be required to obtain permissions from or provide information to any strategic health authority."

Earl Howe: This is a probing amendment about strategic health authorities. We have been led to understand that strategic health authorities will have no role whatever in performance-managing foundation trusts. The fact that they are nowhere mentioned in the Bill is, on the face of it, confirmation of that understanding. However, I should be grateful if the Minister would clarify what functions, if any, strategic health authorities will continue to have in relation to foundation hospitals. In particular, I believe that money from the NHS Modernisation Fund is usually channelled through SHAs. How will such money now be distributed to foundation trusts?
	The amendment is phrased as it is because I would not want the Minister to think that I am advocating a further line of reporting for foundation trusts beyond those that are being created for them. Nevertheless, one benefit of performance management is that it can often prove helpful to a trust as a means of identifying any problems at an early stage and of providing appropriate practical assistance. The intention is that all NHS acute trusts should achieve foundation status within five years, so the question arises: what role will strategic health authorities have after that? Will there be a mechanism to substitute for the constructive role currently played by SHAs?
	One of strategic health authorities' other main roles is to provide oversight of specialised commissioning arrangements. HIV/AIDS, renal services, haematology, neurosurgical services and neo-natal intensive care are examples of services provided across more than one PCT. Presumably—although we shall debate this in more detail when we reach Clause 29—foundation trusts will have an important role in delivering those jointly commissioned services. For those services not to be overseen by anyone is unthinkable. They are often extremely complex and difficult arrangements to establish and deliver. Equally, from time to time disagreements between hospitals need to be sorted out. I see no mechanism in the Bill to resolve those disagreements other than the broad duty of co-operation set out in Clause 29.
	At the same time, I am instinctively uncomfortable with the thought that the role of SHAs should be replaced by enhanced functions for the regulator, who is not close to local events or circumstances and could not necessarily add much value to the process of ensuring genuine local collaboration. Ministers will need to explain this area much further if we are to be comfortable about the future of specialised services over the longer term. I hope that the Minister can enlighten us. I beg to move.

Baroness Andrews: I shall deal specifically with the terms of the amendment. It invites us to explore the relationship between SHAs and foundation trusts. It is an opportunity to make clear that, while foundation trusts are firmly within the NHS and subject to national standards of performance, they will not be overseen or performance-managed by SHAs. Each NHS foundation trust will take full responsibility for the outcomes that it achieves as regards volume, quality and responsiveness to patients. So they will not be required to obtain permission from, or to provide information to, any SHA. The amendment is not necessary.
	I shall attempt to answer the noble Earl's other questions. Strategic health authorities—the local headquarters of the NHS, if you like—will continue to have a significant role in establishing and implementing the vision of the local health economy, the long-term plan and the shape of the overall development of services in their area, backed by commissioning decisions of primary care trusts. In addition, we expect that SHAs, together with higher and further education institutions, will continue to be involved in making arrangements for education and training through workforce development confederations. So, however the foundation trust programme evolves, there will be a continuing role for the strategic work to be done by SHAs.
	The noble Earl also asked about commissioning arrangements. The strategic health authority has responsibility for specialist commissioning. We know that those 37 areas of specialist commissioning are very important aspects of the NHS's work because they deal with some very rare conditions with very small groups of people who need to be thoroughly protected—for example, aspects of renal care or paediatric services. The relationship between SHAs and foundation trusts in relation to commissioning will be as it is now. It will be contracted in the same way, and the same arrangements will apply to the relationship that now obtains with the trusts. But the nature of the contract will change. Contracts will be binding and legal. We are making those for foundation trusts because we want greater transparency so that we know exactly what will be delivered. We want better security in innovation and development. The changing nature of the contract should enable us to deliver that. There will be no change in the capacity to commission or the trust's ability to commit to delivery.
	The noble Earl made a point about the role of the modernisation agency and the position of SHAs. To the extent that any public funds are made available for any central initiative—for example, the national framework initiatives—foundation trusts should have access to an equitable proportion of those funds, wherever the source is. Such funding might be paid by way of a grant or injection of public dividend capital from the Secretary of State under Clause 11. That could be distributed by SHAs for that purpose.
	The noble Earl also raised the question of CHAI. It will continue to have a role in the inspection of foundation trusts. Its functions will closely mirror its functions in relation to other NHS bodies. It will encourage improvement, carry out annual reviews, publish performance ratings and carry out value-for-money studies. But the main difference is that they will report those aspects, not to the Secretary of State, but to the independent regulator.
	I confirm what the noble Earl said about the duty of partnership. It is in the Bill for a purpose. That duty of partnership is very much to ensure that, although foundation trusts are a different animal, they are firmly within the NHS and will work with SHAs in the appropriate way. For example, they will be able to continue to provide much of the information that they provide to SHAs at present, as part of their own commissioning arrangements. We look forward to that partnership flourishing in the future.

Baroness Cumberlege: In the past, we have looked at SHAs as holding the ring in the local economy. We know that in the future some people will be outwith the ring—foundation hospitals. If a foundation hospital finds that a specialist service such as neonatal intensive care, for example, will be uneconomic, or that it cannot attract the necessary staff, and decides to discontinue the service and not to seek a contract with the primary care trust, the regulator can come in and look back at something that has already taken place, but he cannot prevent something happening. What happens in those situations?

Baroness Andrews: As I understand it, the SHA will have a view on that. What we expect to happen is largely what happens now: people, including the other commissioning bodies, will get around the table to discuss the needs of the local community and how they can best be met. There may be another contract for specialist commissioning with another hospital in another area that can offer an even better service. I would expect such discussions to happen just as they do now.

Baroness Finlay of Llandaff: Perhaps I may explore further the information flow that will be available to a strategic health authority. If I heard the Minister correctly, the foundation trust will not have to report to the strategic health authority. So the strategic health authority will be able to invite information, but it will be up to the foundation trust to give or withhold whatever information it might perceive to be in its best interest. On the basis of the information it receives, the strategic health authority will take a decision on specialised commissioning. I am concerned that they will then be able to ask CHAI for information founded on only an inspection that it might have carried out some time ago. Changes that might occur in the local health economy could be disguised in the name of commercialism. I do not see how the strategic health authority will be able to obtain detailed information if the foundation trust decides that it does not want to disclose it and just wants to have the contract continued.
	I am sorry to push the Minister further, but I am worried about an information gap appearing between those responsible for highly specialised commissioning and those who will provide the services. Until now, as the noble Baroness, Lady Cumberlege, said, the strategic health authority has had a duty to hold the ring on services in an area, and has done so.

Baroness Andrews: One of the points that I did not make in response to the noble Baroness, Lady Cumberlege, was that the regulator can also protect specialist services essential to the NHS, because he can require the provision of certain services under Clause 14. That extra security is built in.
	In response to the very detailed question about information flow, I understand that the SHA cannot require the trust to provide information, for the reasons that I explained. But the sort of information coming forward from the trust at present, which informs its commissioning process and delivery, will obtain and continue to flow in the same way. I do not share the noble Baroness's concerns about an information gap. But, if it would help, I will write to her to try to spell out, for the purposes of the debate and for other Members of the Committee, how we see the process working. As the noble Baroness must know, the contracts between the trusts and commissioners are quite detailed. The changing nature of the contract may involve more information being exchanged than at present. We will certainly write to noble Lords and set that out in a little more detail.

Baroness Masham of Ilton: As there are queries and concerns about specialised services, will the Minister spell out to us all, rather than just to my noble friend, the exact duties that strategic health authorities will perform?

Baroness Andrews: Yes, I am happy to do that for the noble Baroness, Lady Masham.

Earl Howe: Not for the first time, the Minister has given the Committee a full and enlightened reply, for which I am very grateful. In many ways, her reply covered even wider ground than my own remarks and we should be grateful for that. Nevertheless, the points raised by my noble friend Lady Cumberlege and the noble Baroness, Lady Finlay, were extremely well put. They are not alone in feeling unease about specialised commissioning and quite what power and leverage the strategic health authority will have in those circumstances. I heard what the Minister said about the power of the regulator, but this is one instance when her offer to enlighten us further by way of a letter will be gratefully received. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 185 not moved.]
	Clause 18 agreed to.
	Clause 19 [Information]:

Earl Howe: moved Amendment No. 186:
	Page 8, line 41, leave out from first "the" to end of line 2 on page 9 and insert "regulator requires"

Earl Howe: Once again, in Clause 19 we see the phenomenon of the independent regulator being elbowed aside by the Secretary of State. Subsection 1(a) specifies that an authorisation,
	"must require an NHS foundation trust to disclose such information as the Secretary of State specifies to the regulator".
	Once again, why is it necessary for the Secretary of State to specify anything at all in this context? Why is not the regulator able to specify the information that he requires? Why does the Secretary of State also need to receive information? I fear that foundation trusts will find that they are supplying the same amount of information as they were before they became foundation trusts. This time, however, they will be sending it in two directions at once. They may actually find that they are churning out even greater amounts of paper than before if the Secretary of State and the regulator do not make a concerted effort to avoid duplication of data collection. That does not conjure up a happy picture because, although data collection is a necessary fact of life in any public service, I thought that the aim was to reduce bureaucracy to foundation trusts not to perpetuate it at current levels.
	Nor do I fully understand why it is necessary in Subsection (2) to empower the regulator to ask any other health service body to deliver to him any information that he may request. That provision is extremely sweeping. For a start, it seems to ignore common-law rights of patient confidentiality. I hope that the Minister can reassure me on that particular issue. However, the provision also suggests that the regulator will be able to demand information from PCTs and non-foundation acute trusts that they may already be sending to the Secretary of State. Again, that is a recipe for duplication. To the extent that the information requested by the regulator is not information to which the Secretary of State has access, one has to ask why such an additional burden needs to be imposed on health service bodies. I beg to move.

Baroness Finlay of Llandaff: I rise to support the wording of the first amendment, but I will oppose the second. I will try to explain why. As is already well known, I am concerned about the involvement of politics in the day-to-day running of the NHS and the flow of political influence prior to an election, with the need, perhaps, to boost the voting ratings by using the NHS as a political football. That is why I was keen to see the Secretary of State a little out of the loop and the regulator left to specify what he felt was really required from foundation trusts. However, I am concerned about leaving out subsection (2) in Amendment No. 187, especially in the light of the Minister's comments in reply to my last question. It is essential that the regulator can draw on as much information as possible.
	I return to points that I made previously about the network provision of care and data from organisations such as the cancer registries. Such information may be very important to the regulator to examine to determine the performance of the foundation trust to see whether it really is delivering the quality care that it claims. There has to be a check for the regulator on information from an external source as well as the information that is provided within the trust. I have tremendous reservations about that. In fact, I would not want anything to stop the regulator's ability to seek information from wherever he felt it should be sought in order to reach an informed decision. With those two different views, I support one amendment but I am afraid to say to the noble Earl, Lord Howe, that I cannot support the second in this group.

Baroness Andrews: It is such a relief to have the noble Baroness, Lady Finlay, on our side even for half the time. One out of two cannot be bad. To address the noble Earl's concerns, I will explain why it is difficult for us to accept his amendments in terms of what we are trying to do with Clause 19. For the Secretary of State to be able to set standards to allocate resources and plan provision of health care across the NHS in line with his responsibilities under the relevant Act he must be able to determine what he needs to know and draw upon information gathered across the NHS. It goes much wider than simply finding out about foundation trusts themselves. The amendment would restrict the Secretary State's ability to carry out his duties with respect to the NHS, and the second amendment would restrict the regulator's ability to monitor compliance with the terms of the authorisation.
	Clause 19 requires the NHS foundation trust to provide information to be used for national policy development, planning decisions, manpower planning and tracking, and so forth. Those are matters that extend far beyond the regulator's function. If the amendment were agreed, it would be up to the regulator to provide such information as he thought relevant. However, it would hardly be appropriate for him to decide what information the Secretary of State needed with regard to those much wider matters.
	I reassure the noble Earl on two points. First, the intention is definitely not to replicate existing data collection. Foundation trusts will have earned their autonomy. There is no line management or performance relationship. We simply expect the information requirement from NHS foundation trusts to be a subset of that required by NHS trusts at the moment. Members of the Committee will be pleased to hear that the Department of Health is currently undertaking work to streamline information requirements throughout the NHS. We are well aware of the arguments about bureaucracy, excessive information and paperwork, and we are doing our best.
	Let me also reassure the noble Earl on the point that he made about confidentiality. The independent regulator does not have the power to require confidential information. The data protection rules apply fully. In any case, common law rights of confidentiality are not affected by this clause.
	The second purpose of Clause 19 is to ensure that the regulator is able to obtain the information that he needs to set the terms of authorisation and monitor compliance with those terms and statutory obligations, as well as investigating breaches. As the noble Baroness, Lady Finlay, said, he may well need access to information from sources other than foundation trusts. The noble Baroness gave the example of the cancer networks in Wales. There are many other examples: it could be information from the PCTs on their commissioning needs or on the services that they have already received from the foundation trusts. The amendment would remove his power to require NHS bodies to disclose information that is essential for any proper judgment to be made about the performance of the foundation trust.
	I reassure the Committee that they are legitimate concerns, and we take them seriously. We do not expect the regulator routinely to collect data from bodies other than the foundation trusts. Nor do we expect that the provision of the information will place a significant burden on them. He is most likely to require specific information if he needs to take specific action, such as varying the terms of authorisation or investigating breaches. Such information may well differ from that routinely submitted to the Secretary of State.
	I hope that, with those assurances, the noble Earl will feel able to withdraw his amendment.

Earl Howe: The noble Baroness, Lady Finlay of Llandaff, need not worry; my second amendment was very much in the nature of a probe. To my delight, the Minister has satisfied me in every respect on that matter.
	There is no argument between us about the need for data collection, providing that the data are necessary. My concern is about the regulatory burden. The Minister has satisfied me on that, in large measure. My fear is, for example, that non-foundation trusts could find themselves submitting information to strategic health authorities, as well as to the regulator. However, it appears, in the light of what the Minister told us about the way in which the power will be used, that that would be unlikely and that the regulator will seek to avoid doing it.
	It has been a helpful exchange. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 187 not moved.]
	Clause 19 agreed to.
	Clause 20 agreed to.
	Clause 21 [Fees]:
	[Amendment No. 188 not moved.]
	Clause 21 agreed to.
	Clause 22 agreed to.
	Clause 23 [Failing NHS foundation trusts]:
	[Amendment No. 189 not moved.]
	Clause 23 agreed to.
	Clause 24 [Voluntary arrangements]:

Earl Howe: moved Amendment No. 190:
	Page 10, line 19, leave out "may" and insert "must"

Earl Howe: In moving Amendment No. 190, I shall speak also to Amendment No. 191.
	Clause 24 deals with voluntary arrangements. I should be grateful to hear a little more from the Minister than the clause discloses about how the power that it confers is to be used. In the first instance, it is not clear why, if the regulator is satisfied that it is necessary to introduce a moratorium or to move to a voluntary arrangement, he then has an option to choose between those two courses of action or, indeed, to do neither. Nor is it clear what the implication of each is for the trust. I would hope that he would issue warnings to the trust in the first instance, before taking any irrevocable step. However, supposing that he specified that there should be a voluntary arrangement, what would be the financial effect on the operation of the trust?
	We all hope that the provisions laid out in Clauses 23 to 25 will not in practice be required, but there needs to be certainty about them. If a foundation trust were forced into dissolution because it had failed and there were unmet liabilities, who would bear the responsibility for those liabilities? How would the creditors be paid?
	The other amendment is designed to give the foundation trust some control over whether its financial difficulties can be resolved under the provisions of the Insolvency Act 1986 that are brought into play by Clause 24(2). As the Bill stands, the regulator is always in the driving seat in deciding upon a moratorium or voluntary arrangement; but we know from the commercial world that it is often the organisation itself that has the best understanding of its dilemma. It would seem sensible, if ever that were to happen with a foundation trust, to allow the board to approach the regulator and ask him to issue a suitable notice under subsection (1). I hope that the Minister will look upon that suggestion constructively; it is intended as a helpful suggestion. I beg to move.

Lord Warner: I accept the spirit in which the noble Earl moved the amendment. Before I deal with the amendments, I shall take the opportunity, as this is our first discussion about the insolvency regime for NHS foundation trusts—I share the noble Earl's wish that we will not need to use the arrangements, but we must make adequate provision—to inform the Committee that the department has prepared a paper setting out our proposals for the secondary legislation, which will, in effect, establish a bespoke insolvency regime for NHS foundation trusts, under Clauses 24 and 25. I have arranged for copies to be placed in the Library, and I tried to arrange for copies to be sent to noble Lords who had spoken in the debate. I detect from the noble Earl's remarks that they may not have arrived. I certainly asked for them to be sent to everybody before today's debate. I will check the arrangements and try to ensure that they are available to noble Lords during the lunch break.
	I did not propose to go through the letter, which is fairly detailed—it is about four or five pages of detail—not least because I wanted to preserve my vocal chords. I shall speak briefly on the amendments. I can see that they are intended to ensure that the regulator imposes a moratorium or voluntary agreement, if it is appropriate to do so. We do not think that the amendments are necessary. Although the regulator's power to impose voluntary arrangements are discretionary, the clause sets out clearly the situations in which he would exercise the power; that is, when it is "necessary or desirable".
	It is highly unlikely that we would get to the point of dissolution without some kind of interchange between a foundation trust that was in difficulties and the regulator—and, indeed, some of their creditors. It would be unusual for that to happen without some interaction between the trust and others, including the regulator. The regulator is also under a duty to act reasonably, which would include exercising his powers under Clause 24, if it were in the public interest to do so. He has an overriding responsibility to protect the NHS. If a voluntary agreement were the best way of protecting NHS interests and assets, one would expect him to use his discretion sensibly.
	I hope that the noble Earl will read the detailed arrangements for a bespoke insolvency system for the NHS. I am happy to discuss it with him, if that would help, after he has had time to consider the details.

Earl Howe: That was a helpful reply. I shall not exercise the Minister's vocal chords any more than I have to. I have not yet received the letter to which he referred, but that may not reflect in any way on his office: I confess to not having opened my post this morning. I look forward to receiving the letter, and, no doubt, we can return to the matter at a later stage, if need be. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 191 not moved.]

Lord Warner: moved Amendment No. 191A:
	Page 10, line 24, after "arrangements)" insert "including any related provision of that Act"

Lord Warner: This is a technical amendment to ensure that the policy intention for the insolvency regime can be properly applied in practice. Other sections of the Insolvency Act 1986—not in Part I—will require modification to allow the insolvency regime for NHS foundation trusts to be fully effective. All that the amendment does is to give powers to make such necessary modifications to the Insolvency Act at a later stage. I beg to move.

On Question, amendment agreed to.
	Clause 24, as amended, agreed to.
	Clause 25 [Dissolution etc.]:

Baroness Noakes: moved Amendment No. 192:
	Page 10, line 38, leave out subsection (2).

Baroness Noakes: Amendment No. 192 deletes subsection (2) of Clause 25. We now turn to the dissolution provisions of the Bill. Subsection (2) concerns the consultation arrangements that the regulator must carry out before winding up a foundation trust. Our amendment is a probing one.
	Clause 12, which deals with the prudential borrowing code, lays down that the regulator should consult the Secretary of State, the foundation trust and other persons that he—the regulator—considers appropriate. But under Clause 25 there is a different formulation based on the regulator having to comply with an order on consultation. Are the Government saying that they do not believe that the regulator would get the consultation right in the case of dissolution? What kind of order is envisaged? Would it be a separate order for every dissolution or would it be a generic one? If it is to be generic, why cannot the discretion of the regulator be relied on, as the Government are content to do under Clause 12? I beg to move.

Lord Warner: The regulator clearly has an important role in considering whether a foundation trust needs to be dissolved in order to protect NHS services. That is why the Bill provides for secondary legislation in this area to prescribe the process leading to the dissolution of a foundation trust. It includes requirements on the regulator to consult in making his decision about the future of a foundation trust. It is not a matter of not trusting the regulator; it is a very important and potentially contentious area. It is important that the consultation arrangements are right and appropriate.
	It is expected that the consultation requirements cover a range of interests, including bodies with responsibilities for NHS services; that is, the strategic health authority, PCT commissioners, Patients Forums, the oversight and scrutiny committee, staff representatives, the Secretary of State and significant creditors, as well as the governors if they have not been removed already under Clause 23(4).
	We think that it is right that the independent regulator consults these groups—there may be others—so that he or she has the relevant evidence required to reach such an important decision about the future of an NHS foundation trust. It certainly would not be in the spirit of the Bill to encourage any arbitrary action in this area. We will put forward secondary legislation in the appropriate form at a later stage, which will go into more detail on the consultative arrangements. I hope that that clarifies matters for the noble Baroness.

Baroness Noakes: I thank the Minister for that reply, from which I take it that the regulations will be generic regulations and not specific to particular dissolutions.

Lord Warner: Perhaps I may reassure the noble Baroness on that point.

Baroness Noakes: I am grateful to the Minister, who, interestingly, said that dissolution is an important matter and that, therefore, it is important to get consultation right. I think that the subtext is that the prudential borrowing code—some of us have significant doubts about its relevance and importance—is not an important matter. We have at least had some light shed on the Government's thinking. I shall consider carefully what the noble Lord said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Noakes: moved Amendment No. 193:
	Page 11, line 1, at end insert—
	"( ) any other body specified by the regulator"

Baroness Noakes: In moving Amendment No. 193, I shall speak also to Amendments Nos. 194 and 195, which concern the transfer of assets and liabilities on the dissolution of a foundation trust. Amendment No. 193 extends the bodies to which property or liabilities could be transferred under subsection (3) to include any other body specified by the regulator. The list in subsection (3) is quite restrictive. It does not allow transfer to a special health authority or to a local authority. There could be some circumstances where that could be appropriate. It does not allow transfer to a private sector healthcare provider, which might be appropriate in, say, diagnostic and treatment centres—or whatever it is that we are now supposed to call them. In general, subsection (3) shows a considerable lack of imagination about what might appropriately be done with assets on a dissolution. Our amendment would allow a greater range of opportunities to be considered.
	Amendment No. 194 tackles a different issue. It provides that property or liabilities not transferred to the people specified in subsection (3) should be transferred to the Secretary of State; that is, assets and liabilities cannot be left in limbo but must be transferred somewhere. That would prevent the regulator from abandoning liabilities, including assets with a negative value.
	In another place, Conservative Members often asked Ministers what would happen to liabilities at the end of the day. They were stonewalled. I hope that the Minister will give us a clear answer today. On our last Committee day, I talked briefly about the doctrine of "standing behind" public sector bodies, whereby the Government are expected to pick up the liabilities of any public sector body, should that situation arise. As far as I am aware, there has never been a case where a public sector body—especially one like a foundation trust, which is classified to central government—has been allowed to go bust without having its liabilities picked up. In that debate, I referred to the Treasury's view that the Government will pick up foundation trust liabilities.
	In effect, my amendment expresses what "standing behind" is all about; namely, that the Government will pick up any liabilities. If the Minister thinks that that is not the case, how would the regulator pick and choose liabilities that would be left stranded? The Bill contains no rational way for any deficit to be shared among creditors. I cannot believe that the regulator has an absolute power to determine which creditors are paid and which are not.
	Finally, Amendment No. 195 provides that liabilities cannot be transferred under Clause 25 without the consent of the person to whom they are being transferred. For example, can the regulator foist liabilities on another foundation trust without that trust's consent? I hope not, which is why our amendment provides for consent. These amendments may seem to be matters of detail, but they raise issues of very real substance which could have practical implications should the unfortunate situation of having to wind up a foundation trust occur, which is not beyond the bounds of possibility. I beg to move.

Lord Warner: Perhaps I may set out the context of the amendments before turning to them specifically. As I have said before, an essential aspect of the new disciplines being placed on management as the quid pro quo for additional freedoms which come within an NHS foundation trust is that the Secretary of State does not intend to guarantee debt. I have said that before. It is important that we begin at that point. In the event of a failure by a foundation trust, the Government would stand behind NHS patients and behind essential NHS services—that is, the protected services—which would be part of the authorisation. They would not stand behind or bail out poor management. I say that again, and it is a point to which we may return several times in later discussion. To ensure that we do not end up bailing out NHS foundation trusts, the Bill includes provisions for a special failure regime with the primary aim of protecting the staff and assets required to deliver NHS essential services. Before turning to the amendments, perhaps I may explain why I shall not address all the detailed points. The insolvency paper I referred to when responding to an earlier amendment deals with some of the specific matters raised by the noble Baroness.
	Amendment No. 194 would require the Secretary of State to pick up all the property and liabilities of a dissolved NHS foundation trust. We have made our intentions quite clear. The effect of Amendment No. 194 would amount to a guarantee on foundation trust viability and thus would be wholly inconsistent with our policy aims. For that reason, we do not think that the amendment should be accepted.
	Amendment No. 193 seeks to ensure that the property of a dissolved foundation trust can go to any body specified by the regulator. Here we return to the important point about what should happen to the protected assets of a dissolved NHS foundation trust. Those assets may be transferred only to other NHS foundation trusts, PCTs, NHS trusts or the Secretary of State because they are protected assets of the NHS. In a dissolution of a foundation trust, it would not be right to enable those assets to be transferred to other alternative bodies. In responding to another amendment, I shall return to the matter of non-protected assets; the distinction here is between protected assets and non-protected assets.
	A private healthcare provider, for example, could be asked to step in and manage a service previously provided by a failed foundation trust. This would be effected either by a franchising arrangement or by tendering for contracts. But the assets associated with that service would remain within NHS ownership and the service would remain free at the point of use. The Bill as currently drafted ensures that NHS assets are not transferred to a private provider in the kind of circumstances that I have indicated; that is, where they are protected assets. We believe it is right that such assets, which are crucial to the delivery of NHS services—and in the spirit of what I have said about the Secretary of State standing behind patients and NHS services, but not bailing out failing management—should be retained. That is consistent with ensuring that those assets could not be privatised or sold off to pay the debts of a foundation trust whose management, in that particular situation, would effectively have failed. That is why Amendment No. 193 would be inappropriate.
	I turn now to the non-protected assets. Once the Secretary of State has arranged for the transfer of those property rights and liabilities essential to the continuity of NHS services, any remaining property and liabilities will be subject to normal insolvency rules. Potentially this could include assets such as retail facilities, car parks and buildings used solely for the provision of private patient care or other income-generation activities. One possibility—it is not the only one—is that such assets could be transferred to creditors, including the Secretary of State, who may himself be a creditor in these circumstances. Alternatively, they could be sold off to meet the liabilities of the failed foundation trust in the same way that trust-owned assets can be sold off at present. That covers the distinction we make here between the protected assets for NHS services and the non-protected assets.
	Amendment No. 195 would ensure that dissolved NHS foundation trust assets and liabilities could not be transferred to another body without that body's consent. We believe that this amendment is unnecessary because both the Secretary of State and the regulator are under a common law duty to act reasonably. Foisting unwanted things on to other bodies would not be deemed reasonable. Discussions with bodies that were to receive the assets and liabilities of a dissolved foundation trust would in any case form part of the transfer process because the regulator would be required to consult those bodies before the powers in Clause 25, including the transfer of property and liabilities, could be exercised.
	I have done my best to address and deal with the points raised by the noble Baroness, but more detail is set out in the letter that I mentioned earlier.

Baroness Noakes: It is clear that we shall not be able to conclude our deliberations on these issues until the letter to which the noble Lord referred has surfaced and noble Lords have had an opportunity to read it.
	I wish to comment first on the point made about discipline on management and not guaranteeing debt. I have never heard an explanation of how not guaranteeing debt results in imposing discipline on management. I understand that nothing in the Bill would make management responsible for the debt. Any debts built up by a foundation trust would remain the debts of that trust and would have nothing to do with the management. Perhaps I may suggest that that is a piece of empty rhetoric.
	Further, I would suggest that the Minister has not yet explained how, if certain liabilities are not to be picked up for one reason or another, the regulator is to choose between them. Given that there is no framework covering the payment for certain liabilities, I am concerned whether such an ability to pick and choose between liabilities, leaving some of them stranded and therefore not met, satisfies human rights law. No doubt we can expand on that point further.
	I look forward to reading the letter, in particular in order to understand how protected and non-protected assets are really defined and to see how the process will work in practice. I had assumed that the importation of the Insolvency Act provisions was much more a matter connected with the voluntary arrangements. Clearly that is something that I shall have to consider further. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 194 and 195 not moved.]
	Clause 25 agreed to.
	Schedule 3 agreed to.
	Clause 26 agreed to.
	Clause 27 [Mergers]:

Baroness Noakes: moved Amendment No. 196:
	Page 11, line 35, leave out paragraph (a).

Baroness Noakes: In moving Amendment No. 196, perhaps I may speak also to Amendments Nos. 197 and 198. These amendments concern Clause 27, which deals with mergers involving NHS foundation trusts.
	Amendment No. 196 seeks to strike out paragraph (a) of Clause 27(2). It states that a merger requires the support of the Secretary of State if one of the parties is an NHS trust. I hope that the Minister will confirm that if the merger involves two foundation trusts, the support of the Secretary of State would be wholly irrelevant. That is an important point.
	Noble Lords will recall our earlier debate on the involvement of the Secretary of State in the creation of foundation trusts. We queried why that matter could not be left entirely to the regulator, and why it is necessary for the Secretary of State to have a veto on the independent judgment of the regulator at that stage. By the same token, we do not believe that the Secretary of State should have a veto or anything approaching that when it comes to mergers of foundation trusts. Those matters should be wholly within the powers of the regulator.
	Amendment No. 197 is a probing amendment to ascertain what role the Government envisage for the Independent Reconfiguration Panel. While the panel is still an unknown quantity, having issued only one report, it seems to us right in principle that the panel should be consulted as a part of any merger decision. The amendment requires only consultation, it does not require the regulator to act on the advice of the panel.
	Lastly, Amendment No. 198 rewrites subsection (6) of Clause 27. The existing subsection requires merger applicants to consult in accordance with regulations. Our rewritten subsection would require the merger applicants to consult in every case—that is, whether or not there are any regulations, and additionally in accordance with regulations. An onus should be placed on the applicant to consult, whether or not any regulations are issued.
	Over time, it is inevitable that mergers of foundation trusts will take place. That is why we believe it is important to get these provisions right. I beg to move.

Lord Hunt of Kings Heath: My noble friend may wish to consider this point between now and Report. There will be any number of reasons for foundation trusts being involved in mergers, but there will be occasions where a merger takes place because of the weakness of one organisation and it is felt that a more successful organisation should, in essence, take over. There have been a number of examples of that within NHS trusts. However, the governance arrangements in such mergers are not always satisfactory.
	Let me give an example. In my own patch some years ago, the Birmingham Heartlands Trust merged with the Solihull NHS Trust, which was in great difficulty. The Heartlands Trust had very strong leadership. Having agreed to the merger, the first thing that happened is that the people who gave incredibly strong leadership to the Heartlands Trust had to apply for their own jobs within the new trust structure. On my reading of the clause, that would happen again in such circumstances.
	It does not make sense. It makes sense where you have a merger of organisations of equal strength, but my reading of the clause is that where a weak performer merges with a stronger organisation, the new governance arrangements in Schedule 1 would, nevertheless, kick into place. I argued, and the House accepted, that there should be transitional arrangements for NHS trusts going forward to NHS foundation trust status, so there is a case for giving the regulator discretion, in the circumstances I have discussed, to allow the governing body arrangements—particularly in relation to the board of directors—to continue in order to achieve continuity. My noble friend may care to look at that issue between now and Report.

Baroness Cumberlege: The noble Lord, Lord Hunt, raises an interesting question. You seldom get a genuine merger in the private sector. That is also true, as the noble Lord said, in the National Health Service. Sometimes the word "merger" is a misnomer for a takeover—and where there is a takeover there are always aggrieved people.
	When one considers mergers and the research that has been carried out on them in the private sector, one finds that they take longer than anticipated, that the benefits are less than anticipated and that they do not achieve the savings anticipated. It is a very distracting process, and many people come out of it extremely bruised.
	If you are a shareholder in the private sector you can anticipate these things and disinvest immediately or later on. In the public sector, in the National Health Service, you do not have the opportunity to do that. The least we can do for our public—who are shareholders but cannot make choices in that respect—is to consult with them and ascertain their views.
	Although I appreciate what the noble Baroness, Lady Noakes, said about the fact that there are bound to be mergers—I am sure that there are—one of the matters that disturbs even those who have the greatest expertise in the NHS is the concern that bigger is not always best. Huge hospitals are now specialising with great expertise, but they are not that good in dealing with multi-pathologies and patients who have a range of problems.
	I hope that the foundation hospitals, if they come into being, are successful. I hope also that there will not be too many takeovers—which I foresee—in the future.

Baroness Carnegy of Lour: In replying to his noble friend Lord Hunt, the Minister will probably remember that in any merger between two foundation trusts there will be attached a huge membership, governors who have been elected by members, and directors who have been appointed by the governors. So there will be a political, with a small "p"—or even, perhaps, with a big "P"—thread running through the discussions on any take-over. When my noble friend Lady Cumberlege refers to aggrieved people, she is thinking about what has happened so far with NHS trusts. However, the grievance may take a more difficult form in a merger of two foundation trusts.

Lord Warner: I have listened carefully to the points made by my noble friend and to the comments of the noble Baronesses. I shall consider what they have said. They raise important issues in regard to governance arrangements if there are mergers. I shall write to my noble friend as quickly as possible and copy the letter to other noble Lords.
	The discussions in another place highlighted a gap in the Bill in that it did not provide adequately for mergers of NHS foundation trusts after establishment. We recognise the importance of ensuring that such mergers should occur in a way that balances the need to minimise bureaucracy with the need to safeguard the interests of the NHS and NHS patients. That is why we have brought forward these provisions. That is the context in which we are discussing the amendments.
	Amendment No. 196 would remove the veto of the Secretary of State over mergers involving NHS trusts. We believe that it is entirely appropriate that the support of the Secretary of State should be required before an NHS trust applies for NHS foundation trust status through a merger with an NHS foundation trust, just as his support would be required if the NHS trust was making an individual application for NHS foundation trust status.
	If the Secretary of State did not have this power, there would be effectively a backdoor route for NHS trusts to become NHS foundation trusts without obtaining his support. In effect, there would be a short cut into foundation trust status without going through the processes that other applicants now have to go through. NHS trusts are ultimately subject to performance management by the Secretary of State, and he will be well placed to judge whether they are in a fit and ready state to move forward to an application to the regulator. It is important to preserve those arrangements in order that we do not create loopholes.
	Amendment No. 197 requires the regulator to consult the Independent Reconfiguration Panel. I remind your Lordships that the Independent Reconfiguration Panel is not a statutory body and so we are up against the issue, upon which we keep touching, of whether it is right to refer in primary legislation to a body or concept that is not statutorily established. On those grounds, it should not be referred to in legislation.
	However, the regulator can take advice from any person he thinks appropriate. This could include the Independent Reconfiguration Panel. I am certainly happy to give the assurance that it is not the Government's intention to exclude it. I shall not outline the details of the arrangements for consultation, but they are fairly extensive and contain many safeguards.
	As regards Amendment No. 198, which relates to consultation on mergers, we will require applicants for mergers to carry out the kind of comprehensive public consultation that would need to occur for any major reorganisation in the NHS. Clause 27(6) provides for the Secretary of State to make regulations setting out the consultation requirements. Compliance with these regulations would be a condition of authorisation.
	We have included this power—believe it or not—because we intend to use it. We expect to introduce the regulations under Clause 27(6) before any applications are made for mergers involving foundation trusts. These are likely to require consultation with the local public and patients— including patients forums, once established—staff, other local NHS bodies and local authorities, including overview and scrutiny committees.
	This important measure is designed to ensure that the views of local communities and stakeholders are sought, listened to and taken into account. However, we do not believe it would be appropriate to remove the Secretary of State's discretion on whether to make regulations and what they should contain, particularly as the requirements may themselves change over time. That, effectively, is what this amendment would do.
	The requirement that a consultation should be "adequate" is simply not necessary. As a matter of law, consultation must be adequate. If it is not, it is open to challenge in the courts.

Baroness Noakes: I thank the Minister for that reply and other noble Lords for their contributions to the debate. The noble Lord, Lord Hunt, raised an interesting point about continuity of management. I suggest that such a provision would be very difficult to draft because the Bill is predicated on mergers, and a merger has no dominant party. What the noble Lord, Lord Hunt, referred to was a takeover, and there is no provision in the Bill for a takeover. It is probably counter-cultural to the NHS to suggest that there might be a takeover. So while the Bill maintains the fiction of merger, I suspect that the points that he has raised, which I completely accept are valid, may be extremely difficult to accommodate in the Bill.

Lord Hunt of Kings Heath: I am grateful to the noble Baroness for giving way. Does she agree that, because of that, it might be appropriate to look at whether the regulator could be given discretion so that he or she could exercise judgment in those cases? I agree with her that it is quite difficult to set hard and fast rules here.

Baroness Noakes: That is a very constructive suggestion, and I hope the Minister will take it into account.
	So far as the Secretary of State's consent is concerned, we will have to agree to differ. We see that the sticky hands of the Secretary of State are far too apparent in relation to foundation trusts. It would be no bad thing, we think, for the regulator to have complete say about whether or not foundation trusts were set up or merged in due course, but we will doubtless not progress that argument.
	I take the Minister's point that the Independent Reconfiguration Panel is a mere figment of the Secretary of State's imagination and therefore cannot be referred to in the Bill. But that is a pity, because then we cannot refer to anything that requires the regulator to consult. If the regulator is not required to consult, the independent reconfiguration panel may wither on the vine, but that may of course be what the Secretary of State intends.
	I was grateful to the Minister for his reply on consultation and his assurance that the regulations would be out before there was ever any issue of a merger. That will deal with the point in my amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 197 and 198 not moved.]
	Clause 27 agreed to.
	Clause 28 agreed to.
	Clause 29 [Co-operation between NHS bodies]:
	[Amendment No. 199 not moved.]
	Clause 29 agreed to.
	Clause 30 agreed to.
	[Amendment No. 200 not moved.]
	Clause 31 [Patients' Forums]:

Lord Clement-Jones: moved Amendment No. 201:
	Page 13, line 19, leave out subsection (2) and insert—
	"(2) In section 15 (establishment of patients' forums) after paragraph (1)(b) there is inserted "and
	(c) for each foundation trust.""

Lord Clement-Jones: In moving Amendment No. 201, I shall also speak to Amendments Nos. 202 and 203.
	We come to one of the largest question marks at the centre of the Bill and one of its major flaws—namely, the failure to provide for patients forums for foundation trusts. The key question in relation to Clauses 30 and 31 is why parts of the existing legislation are not being amended so that foundation trusts are put on the same basis as NHS trusts. This is the mystery of the dog that is not barking; I am sure the Minister will be putting on his deerstalker and trying to elucidate matters later in the debate.
	Let us first look at the existing legislation. Section 11 of the Health and Social Care Act 2001 provides for public involvement in consultation. This is a very general provision, which states that it is the duty of everybody to which the section applies, including NHS trusts,
	"to make arrangements with a view to securing, as respects health services for which it is responsible, that persons to whom those services are being or may be provided are, directly or through representatives, involved in and consulted on—
	"(a) the planning of the provision of those services,
	"(b) the development and consideration of proposals for changes in the way those services are provided, and
	"(c) decision to be made by that body affecting the operation of those services".
	That is a very general provision which is being amended to include foundation trusts. But when one looks at that section, that was always intended. It was purely coincidental that that section went through on the 2001 Act; it was not part of the 2002 Act. The Minister may have had a crash course in the history of this particular part of patient and public consultation. I hope he has, because it is very convoluted and hard fought.
	Without the patients forums provisions, that is not a very useful piece of stand-alone legislation. There are no sanctions for failure to comply. Indeed, the provisions are extremely vague in the way in which they are applied.
	Let me turn to something rather more specific which was deplored on these Benches and the Conservative Benches as not being nearly as satisfactory as the one-stop shop provided by community health councils. We had that debate on both Bills as they went through this House.
	Section 15 of the National Health Service Reform and Health Care Professions Act 2002 provides for the establishment of patients forums. Such forums have very specific duties under that section. They must monitor and review the range and operation of services provided by, or under arrangements made by, the trust for which it is established; obtain the views of patients and their carers; provide advice and make reports; make available to patients and their carers advice and information about those services; and so on. These are very specific provisions.
	Section 16 provides additional functions for PCT patients forums. The Government have simply provided for PCT patients forums to have a degree of responsibility for reporting on foundation trusts. But there is no extension of the power, for instance, to insist that foundation trusts respond to the concerns of the PCT patients forums. Ultimately, no separate patients forum is specifically provided for by amendment to Section 15 of the 2002 Act. That is a major hole in the middle of the Bill, which the amendments are intended to remedy.
	There are other aspects which the Government have provided for. They give the Commission for Patient and Public Involvement in Health a role in relation to foundation trusts. However, it appears that they have very little capacity to fulfil that and none of that makes up for the fact that no patients forums will be provided for in the Bill.
	Having set up the architecture of patient and public involvement for individual NHS trusts, it seems inexplicable that the Government have gone down this route. Do they believe that the board of governors will fulfil this role? We heard, as we went through the Government's provisions, that the role of the board of governors will be utterly minimal. There is nothing like the detail setting out what kind of public involvement mechanism there will be for the board of governors. So far as one can see, the role of the board of governors will simply be to elect the non-executive directors.
	This seems a very shaky model, particularly when the Government were extolling its virtues. Indeed, they extolled its virtues on the basis of the recommendations of the Bristol inquiry. The Bristol inquiry put forward a model which the Government claimed to be implementing when putting forward the patients forums. I have not looked back at the precise form of the parliamentary commitment given by Ministers as the legislation on patients forums went through, but it seems a far cry from the Government's commitment to patient consultation and involvement at the time that both pieces of legislation went through for the Government now to say that foundation trusts will not be included in that.
	There is grave disquiet on these Benches. It seems that what the Government will eventually allow to happen is the withering away of patient information and consultation. That seems a somewhat extraordinary step only a year after the passing of the 2002 Act. We need considerable tightening up in this area. I very much hope that the Government will have a change of heart on this matter and move forward to put foundation trusts on all fours with NHS trusts. I beg to move.

Earl Howe: I rise to support the noble Lord, Lord Clement-Jones, in all that he has said. He has put the case extremely well. Only a few months ago Parliament agreed to the creation of patients forums as successors to community health councils on the clear understanding that every NHS trust and every PCT would have one; in other words, both providers and commissioners. Never was there even a hint from Ministers that the creation of foundation trusts would render those assurances null and void as regards the providers. Only when this Bill was published did we realise that the goalposts had been moved even before they had been planted into the ground. So now, just as the new national system of patient and public involvement is being rolled out in statutory instruments, we are engaged in debating a Bill which ensures that that system will be condemned to a limited span of life. It is a state of affairs that must be unique in parliamentary history and demonstrates either a lack of candour by Ministers originally or else—which I find more likely—policy-making on the hoof and simply a disregard for undertakings given.
	The argument that patients forums are no longer needed because of patient representation on boards of governors was dealt with very well by the noble Lord. It is an argument that rests on a false premise. Accountability has three strands: the governance strand; in other words, the mechanism by which an organisation is controlled and managed to ensure that it delivers; the scrutiny strand to make sure that what has been promised is properly delivered; and patient and public involvement, which influences the delivery of services to match the needs of users. Neither scrutiny nor patient and public involvement can be done in-house. They require an arm's length relationship to ensure impartiality and to avoid conflicts of interest. Governors are an intrinsic part of their organisation. Their lack of impartiality will mean that they cannot also be scrutineers. To blur the distinction between those three strands of accountability is bound to lead to all three of them being compromised.
	It is no good the Government saying—as they do—that PCT patients forums will perform the scrutiny and involvement roles in foundation trusts. The remit of a PCT patients forum in this context is a much more limited one, as the noble Lord correctly said. At the end of the day foundation trusts can ignore what they say. That is a long way from the kind of influence and leverage that patients forums will have in ordinary NHS trusts. The absence of a duty to create a patients forum in every foundation trust should not be looked at in isolation, I suggest. It should be seen against the background of an absence of legal accountability elsewhere. Neither governors nor, indeed, members of a foundation trust are accountable in law to anyone at all.
	The Government are saying that it is up to the constitution of each foundation trust to determine whethe there is a patients forum within the hospital. That is one instance where I could have wished that the Government had chosen to be more prescriptive, not less. That lays me open as an easy target for the Minister but I would find it surprising if he did not agree with me—as Ministers have stated repeatedly in the past—that a patients forum should be seen as one of the essential checks and balances in the delivery of a responsive and patient-centred health service.

Baroness Pitkeathley: There is one thing of which there can be no doubt and that is this Government's complete commitment to the absolute necessity of putting patients and their families absolutely at the centre of the NHS. We have ample evidence of that in the setting up of the Commission for Patient and Public Involvement in Health, the other arrangements and, indeed, the huge consultation exercise which is going on at the moment in the Department of Health about patient and public involvement. The governance arrangements for foundation trusts offer the opportunity to further this issue. There can be absolutely no question of a withering away as the whole issue of patient and public involvement has now gained such momentum that no provider of health services can ignore it. The absence of specific duties for patients forums within the foundation trust structure is an anomaly. I very much hope that the Minister will be able to reassure us about the Government's continued commitment to ensuring the maximum patient and public involvement in foundation trusts as throughout the rest of the health service.

Baroness Finlay of Llandaff: I should have liked to add my name to these amendments but due to a clerical oversight on my part I did not. Of course the Government have tried to put the needs of patients and their families at the heart of things. Like the noble Baroness, Lady Pitkeathley, who has just spoken, I view this matter as an oversight. I am flabbergasted that these amendments were not incorporated in the Bill before it reached us.
	I have a major concern regarding patients who are extremely ill. They will be in-patients in the foundation hospitals. They are quite different from the medically well who will constitute the public who will be consulted and may join a board of governors. They are very different from the medically slightly unwell who will probably express opinions out in the community. When patients are very ill, no one should underestimate how vulnerable they are and how difficult it is for them to express concern or dissatisfaction with any aspect of their care. Attention to detail is absolutely crucial in improving the quality of care that they receive. Without a patients forum right at the heart of the provider who is providing services for these very ill people, I fear that their vulnerability could be overlooked and that they could be subject to a paternalistic and, dare I say, even arrogant approach by the management of a foundation trust who, for whatever benevolent reason, believe that they know best what is right for those patients and do not give them a forum in which to express themselves. I find it astounding that we do not establish a patients forum right at the heart of this measure. I urge the Minister to look very seriously at the proposals before us.

Baroness Carnegy of Lour: Once again the noble Baroness, Lady Finlay, has reminded us what it feels like to be inside a hospital. We in this House find it easy to conceive how the public will view these hospitals. We can imagine how the members of a trust will view the hospital. We can imagine how they will feel about the board of governors and so on.
	In hospitals, where there are vulnerable people—and almost all patients will be vulnerable, especially long-term patients—there must be some mechanism. Most of us who visit people in hospitals have seen the problems there and how difficult it is for families and patients to express their complaints. For example, people may want to complain about the way in which they are fed—about whether it is ensured that they can get the nourishment that they need and reach the cup of tea that has been served up. There are all those small things that people find it very difficult to complain about, on which a person's life may depend.
	I hope that the Minister does not simply tell us how the governors will be able to deal with those important matters. I cannot see how a trust can operate properly without a mechanism to deal with them.

Lord Hunt of Kings Heath: I agree with my noble friend Lady Pitkeathley. I am disappointed by some comments made by noble Lords on the matter, because they display a lack of trust in the leadership of foundation trusts in ensuring that there will be proper and effective patient involvement in their activities. I hope that we shall not be prescriptive and that we will allow each foundation trust to make its own arrangements.
	I simply ask noble Lords to consider the consultation documents issued by applicant foundation trusts in the first wave. What is so impressive about that documentation is how much effort and focus has been devoted to the arrangements that they want to make to ensure that public and patients are involved and can make their views known. It is very unlikely that any future foundation trust will want to go forward without having robust patient involvement arrangements. I hope that we shall show some trust in those organisations to make their own arrangements, subject to the overriding considerations in the Bill.
	I agree with the noble Lord, Lord Clement-Jones, in his reference to the distinction between patient representation and the work of governing bodies. It is very important that the two are kept distinct. Governing bodies are not there to carry out the role of patients forums or organisations like them. I am worried that a number of foundation trusts are referring to the governing bodies as patient councils. They are not patient councils or members' councils but governing bodies. It is very important to keep that distinction.

Lord Warner: The architecture that we have constructed is not quite as shaky as the noble Lord, Lord Clement-Jones suggested. I am grateful for the points made by my noble friends Lord Hunt and Lady Pitkeathley.
	The Government totally accept the need for independent patient involvement. Patients need to be satisfied that their interests are considered at all stages of patient care. However, independent scrutiny and monitoring of NHS foundation trusts will be carried out by PCT patients forums and overview and scrutiny committees of local authorities. Advice about patient and public involvement will be provided to them by the Commission for Public and Patient Involvement in Health. That is the context in which we are discussing the matter.
	PCT patients forums will carry out a range of roles with respect to NHS foundation trusts, including monitoring and reviewing services commissioned by the PCT; monitoring how successful NHS foundation trusts are at achieving involvement, including some capacity for inspection; advising NHS foundation trusts on the range and operation of services that they provide, and on encouraging involvement; representing the views of members of the public; and being able to refer relevant matters to relevant bodies—for example, the independent regulator or the overview and scrutiny committee. Those bodies will be engaged in the work of NHS foundation trusts.
	Individual NHS foundation trusts may decide to put in place arrangements reflecting many of the functions of patients forums, if they believe that such arrangements are a helpful way in which to discharge their accountability and ensure patient-led monitoring mechanisms. There is nothing in the Bill to prevent trusts from going down that path in the application that they make for foundation trust status.
	PCT patients forums will also promote the involvement of members of the public in consultations, decisions and policy development by NHS foundation trusts, and advise on encouraging involvement and on compliance with their Section 11 duties. As I said, they will carry out other roles, too. There is extensive provision for patient involvement in the new world opening up with NHS foundation trusts.
	However, I recognise that there are strong feelings and concerns about the issue across the House, and I am prepared to give an assurance that we will consider the issue further. More specifically, we shall certainly consider whether we can give more reassurance to Members of this House and those outside who feel so strongly, by requiring NHS foundation trusts initially to have a patients forum, while retaining the discretion to disband them if, subsequently, they seem unnecessary, given the other arrangements in place locally that I have outlined. We should not dismiss the present architecture quite as quickly as many noble Lords have done, but I am happy to give the assurance that we will carefully consider an alternative to provide more comfort for patient interests, and to show that we are really serious about patient involvement on the providers' side.

Baroness Carnegy of Lour: I wonder whether that is the right answer. It is the sort of answer that the Government are inclined to give—that we shall have a temporary arrangement and see what is necessary. It sounds all right, but if one was setting up a foundation trust it would be particularly irritating to have a temporary arrangement and then to have to think of something else.
	Would it not be better to put into the Bill a provision that foundation trusts have a duty to have some arrangement for patient consultation? We should change the Bill, leaving foundation trusts to make the arrangement they want. Would that not be a better answer? I do not know what my noble friend Lady Cumberlege or the Liberal Democrats think about that, but it strikes me that that would be a better response from the Government.

Lord Clement-Jones: I welcome some of the Minister's words but, like the noble Baroness, Lady Carnegy, I have my doubts about the rather tentative way in which the Minister rounded off his response. We had a firm, hard assurance from the Government, but then we find that the actual words are very flabby when written down on paper. That is the problem with the measure on these Benches, and, I suspect, on the Conservative Benches as well.
	Like the noble Baroness, Lady Finlay—although I am rarely flabbergasted by what the Government do—I am mildly surprised by the fact that they have not included the sort of provision that we have suggested. I should have thought that a way of creating a more acceptable context in creating foundation trusts would have been to bolt them into the patients forum structure.
	The noble Lord, Lord Hunt, more or less alleged that we have a lack of trust in trusts. Of course, one can turn on the moral imperative in these circumstances, but it is not that we have a lack of trust in trusts. People tend to do what they are obliged to do, and it always creates a problem if there is an optional extra for which they have to find money out of existing budgets. One sees that in social care and, no doubt, if the amendment is not passed, we shall see it in health care as well. After all, the staffing costs and other costs of patients forums are met in existing NHS trusts through the Commission for Patient and Public Involvement in Health. That will not be the case for foundation trusts.
	The noble Lord, Lord Warner, says that he totally accepts the need for patient and public involvement, but everything becomes conditional after that. He says, "If the trust believes", "There is nothing to stop them", and so on. There is no requirement. The PCT patients forum is of course a very different animal, as I explored in my opening remarks. Above all, there is no requirement on the foundation trust to respond to anything that a PCT patients forum says to it. The Government have deliberately omitted amending that provision in the 2002 Act. None of this is accidental or co-incidental. It is all utterly deliberate, which is depressing.
	When the Minister talks about an alternative, I hope that he is going to consider seriously the alternative contained in the amendment, otherwise I assure him that the issue will come thundering back on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 202 and 203 not moved.]
	[Amendment No. 204 had been withdrawn from the Marshalled List.]
	Clause 31 agreed to.
	Clauses 32 to 34 agreed to.
	Schedule 4 agreed to.
	Clauses 35 to 37 agreed to.
	Schedule 5 [Audit of accounts of NHS foundation trusts]:

Baroness Noakes: moved Amendment No. 205:
	Page 128, line 37, leave out ", in the public interest,"

Baroness Noakes: I shall speak also to Amendments Nos. 206 and 207. The audit provisions in Schedule 5 are rooted in the audit arrangements for local authorities. I remark in passing that they are a more logical fit with the imposition of the Audit Commission as auditors, about which the Liberal Democrats spoke earlier. The amendments seek to challenge one part of those arrangements in relation to public interest reports.
	In the Bill, the Government have tried to create bodies that are accountable to their members. That is the driving force behind their proposals, as I understand it. The guide to foundation trusts referred to that as local public ownership and accountability. In the guide, which was issued in December, we were told that there would be,
	"accountability mechanisms to local people",
	most notably through governance arrangements that would define accountability to the local community. That is all very well. However, the audit arrangements are one of the strongest forces for underpinning accountability, and in them we find no mention of local members or the local community.
	I suggest that that is another of the confusions at the heart of the Bill's approach to foundation trusts. They are local when it suits the Government to make them local, but not otherwise. In effect, our amendments replace the concept of public interest with the interest of the members of the trusts. Public interest may be too restrictive a notion in terms of what auditors should report on as a result of their audit effort. Local foundation trusts are not local authorities. They should be primarily accountable to their members according to the Government's doctrine.
	Many other aspects of Schedule 5 could usefully be amended to reflect the role of the board of governors, which appears nowhere in it. I hope that the Minister will be prepared to look again at those arrangements to reflect the kind of accountability that the Government say that they espouse. I beg to move.

Lord Warner: We found the amendment slightly surprising. Membership provides a mechanism for the public to get involved in the running of hospitals, but NHS foundation trusts do not use membership as a means of deciding who gets what type of service. They have a much broader responsibility, providing NHS services for the benefit of the public generally, not only for the members of the NHS foundation trust. It is therefore appropriate that the auditor should determine whether a report should be made for the interest of the public generally and not only for members.
	The amendment seems to narrow the obligations of the auditor and leave the general public out of the picture. Whatever the intentions may have been, the amendment does not benefit the public because it narrows the auditor's responsibilities.

Baroness Noakes: I thank the Minister for that brief response. I think that he failed to deal with the point that I put to him, which was that nothing in the schedule related to the accountability structures that the Government have alleged that they are creating. Accountability to the members of the trusts is completely absent from Schedule 5. I shall reflect on his answer and perhaps table a raft of different and more extensive amendments to consider on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 206 and 207 not moved.]
	Schedule 5 agreed to.
	Clause 38 [General duty of NHS foundation trusts]:

Baroness Barker: moved Amendment No. 208:
	Page 15, leave out line 6 and insert "ethically, and put and keep in place arrangements for the purpose of monitoring and improving the quality of health care provided by and for that body"

Baroness Barker: The amendment is very simple but none the less important. Clause 38 sets out the general duty on NHS foundation trusts that they must exercise their,
	"functions effectively, efficiently and economically".
	Nowhere does it require hospitals to act ethically. Our amendment would restore that fundamental duty in healthcare to foundation trusts.
	One could recite many different examples in which hospitals have acted efficiently and economically, but under the regime put forward for foundation trusts they would not be required to act ethically. Medical ethics might at times not be efficient or economic, but are nevertheless important. It is perhaps no surprise that my colleagues in another place considered the amendment when it was revealed that A&E services had effectively been completely distorted earlier this year, to make sure that A&E performance figures met the time scales put on them. That may have been a demonstration that they could work efficiently and economically, but I am not sure that it was at all ethical.
	I am not a doctor and do not pretend to be. However, I am sure that in many different medical fields there are efficient and economic practices. Whether they are ethical or not is a separate matter. The issue that comes to my mind is the performance of caesarean sections in maternity provision.
	It is wholly wrong that foundation trusts should not be subject to such a duty. I am sure that their staff would wish to act ethically. Therefore, the provision should be in the Bill. We talked earlier about a duty of equality, and the amendment is about the quality of the care provided by the hospitals. The amendment may be simple, but it is of fundamental importance. I beg to move.

Baroness Finlay of Llandaff: I support the amendment. I know that everyone is hungry and I do not wish to give a lecture on bio-ethics, but I remind the Committee that as well as autonomy, beneficence and non-maleficence, there is also the principle of justice. Justice demands that the patient has the right to the best treatment within the resources available, but it also demands the just allocation of resources. It is completely dependent on management to allow the just allocation of resources and to allow the other principles of ethics to be invoked. Beyond those four principles, there are also issues surrounding scope and the size of the decision, and so on. That is a fundamental and important principle if foundation trusts are really to serve the population they are intended to serve; that is, people who are extremely vulnerable.

Baroness Andrews: Would that we had time for a seminar on medical ethics. We would probably enjoy it a lot, lunchtime or no.
	As the noble Baroness has said, it is a simple but important amendment and I understand the case that she makes. Under Clause 38, the independent regulator will monitor the NHS foundation trusts' performance against that duty through their audited annual financial statements. I want to make sure that that is clearly understood.
	Under Clause 44, an NHS foundation trust will be under a duty to put and keep in place arrangements for the purpose of monitoring and improving the quality of healthcare provided by and for that body. It would be an unnecessary duplication to include that duty also in Clause 38, but specific only to NHS foundation trusts.
	I would ask whether the term "quality" would imply an ethical dimension. I hope that it would always do so. However, I can reassure the noble Baroness that foundation trusts will be bound by the Human Rights Act 1998. That will ensure ethical and equitable behaviour. On those grounds, it is unnecessary to duplicate a duty in the legislation.

Baroness Barker: I thank the Minister for her thoughtful answer. I was worried to hear her say at the beginning of her response that the independent regulator would review foundation trusts through their financial statements. We are talking a completely different language when discussing ethics.
	Perhaps the Minister shone a torch on the reason for including the amendment in such a belt-and-braces fashion. I admit that it is a belt-and-braces fashion and there is a good reason for it. When one looks at the Bill in its entirety and sees the number of words devoted to finance, efficiency, and so on, the one area in which it is deficient above all others is that of ethics. I will reflect further on the Minister's suggestion that quality implies ethics. When we reach Clause 44, I do not doubt that we shall discuss the issue further. For the moment, and in view of the hour, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 38 agreed to.
	Clause 39 agreed to.

Lord Warner: This may be a convenient moment to take a break in the Committee's proceedings until after Starred Questions. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.
	House resumed.

Baroness Andrews: My Lords, I beg to move that the House do now adjourn during pleasure.

Moved accordingly, and, on Question, Motion agreed to.
	[The sitting was suspended from 1.34 to 2 p.m. for Judicial Business and to 3 p.m. for Public Business.]

Horse Passports

Viscount Astor: asked Her Majesty's Government:
	Why they are asking all horse and pony owners to apply for horse passports when the required statutory instrument has neither been laid before, nor approved by, Parliament.

Lord Whitty: My Lords, in February 2002, the Government announced that, in order to comply with European legislation, all horses would be required to have passports by the end of 2003. Earlier this year, the Government consulted on a draft statutory instrument implementing that announcement. The final version of the statutory instrument will be laid before Parliament shortly.

Viscount Astor: My Lords, I thank the Minister for his Answer. Can he explain why, in the consultation paper issued by his department, a second option was given—that of passports purely for horses that would be entering the food chain? It was not a requirement that all horses have passports. Is this not a case of the Government, again, gold-plating a directive in an entirely unnecessary way?

Lord Whitty: No, my Lords. Indeed, the majority of organisations within the equine industry supported the view that, in order to comply with the European legislation, it would be more sensible to ensure that all horses were covered by the passport legislation. In that way, we could ensure that horses not destined for the food chain could continue to receive the veterinary medicines which would otherwise be banned.

Viscount Falkland: My Lords, is it not the case that the almost universal derision with which this measure has been met—certainly within the horse community—is due to the fact that most people realise that, for a human, obtaining a passport is a voluntary act? If you wish to travel, a passport provides you with government protection. However, apparently horses and donkeys are made compulsorily to have passports, whether they are travelling, as some do, and may need them or whether they are munching in a field. Is this really a passport or are we talking about a registration document? If the latter, why not say so? The presentation here has been quite incredible.

Lord Whitty: My Lords, I completely refute the first part of the noble Lord's question. Although there was a certain amount of derision in the short debate that we had in this House, by and large, as I said, the equine organisations support the legislation. It is, in a sense, a registration document and "passport" may not be the most appropriate term, although it would be used if the horse went between one European country and another.

Lord Higgins: My Lords, as the motivation for this impractical measure seems to come from those involved in the horsemeat trade, is the Minister aware of the concern of the International League for the Protection of Horses that, under the new draft legislation, it would not be possible for the UK to ban the export of live horses for slaughter? What is he going to do about that?

Lord Whitty: My Lords, it is true that the European Union is considering, as a separate issue, the regulations covering the transport of live horses. It is also true that, although in a rather indirect way, the UK ensures that horses and donkeys are not exported for slaughter, although that is not an explicit regulation at present.

Baroness Masham of Ilton: My Lords, would it be possible to have a kind of geriatric passport for elderly children's ponies which will not enter the food chain and will not be sold? Would that not be a kind thing to do?

Lord Whitty: My Lords, I assume that the noble Baroness meant "children's elderly horses". Clearly, in the enforcement of this legislation, both local authorities and the FSA will consider the priority areas. But any horse, however elderly, could change hands and could therefore require this degree of legislation. Therefore, in the long run, it would be better if all horses were covered.

Baroness Byford: My Lords, does the Minister accept that it is estimated that only 10,000 to 12,000 horses and ponies are exported for human consumption? Would it not be far more sensible if only those animals were required to have documentation? Further, does he agree that, following the issue of the consultation paper, it was recommended that those animals should not be given medicines six months prior to being killed? If that is the case, would it not be sensible to put a stop to the overall passport scheme and to apply it only to horses that are to be exported for human consumption?

Lord Whitty: My Lords, clearly the motivation for these regulations was to deal with horses for human consumption. Some human consumption of horsemeat does take place in this country, so let us not pretend that it is consumed only by foreigners. The benefit of having a comprehensive horse passport system is that horses whose owners declare them to be not destined for human consumption will continue to be able to use the veterinary medicines which would be banned were that not clear. Therefore, one good reason for pursuing this matter, and one reason that the industry, by and large, supports it, is that we would be able to continue to use traditional veterinary practices.

Baroness Gardner of Parkes: My Lords, can the Minister tell me what the penalty will be for failing to register or obtain a passport for a horse, how enforcement will be carried out and what the cost of enforcement will be?

Lord Whitty: My Lords, the noble Baroness will have to wait until the statutory instrument is placed before this House. That should be within the next month or so. Enforcement will be carried out by the Food Standards Agency in relation to animals which are, or may be, destined for food consumption. The rest will be dealt with by local authorities—usually through trading standards offices. The level of enforcement will be relatively light.

Lord Berkeley: My Lords, if my noble friend is correct, horses are exported live to France, with or without passports. Does he really believe that the French authorities will care whether they have the right documentation before they are slaughtered in France?

Lord Whitty: My Lords, I am surprised that my noble friend has such a poor view of the French. Horsemeat in France has long been a part of the diet of certain sections of French society, and the French, above all, are fairly careful about what they eat. Therefore, I believe that French potential slaughterers, whether of French horses or otherwise, will be very careful and will require this documentation.

Lord Swinfen: My Lords, if a horse is sold at auction and has previously been given banned medication, how will the new owner, who might use it or sell it for human consumption, know that it has had that medication?

Lord Whitty: My Lords, most horses will have some documentation. If a horse changes hands at an auction, once the passport system is up and running, the passport will either carry a declaration that the animal is not destined for human consumption, in which case the new owner would not be allowed to use it for that purpose—the designation cannot be changed—or it will indicate that it is for human consumption and therefore, as the noble Baroness has just said, the last six months of its veterinary record would need to be checked.

Baroness Byford: My Lords, perhaps I may suggest to the Minister that I consider the Government to be very complacent in this matter. The consultation finished in June this year. The legislation is due to be implemented in November this year, when animals must also be registered, and the noble Lord has just said that the statutory instrument might be brought forward in the next month or so. I believe that November is the next month.

Lord Whitty: My Lords, I certainly agree with the noble Baroness on that last point. It is our intention to bring forward the statutory instrument in November. We are still considering whether any leeway should be given in respect of the implementation date.

Iraq Survey Group: Accountability

Lord Wallace of Saltaire: asked Her Majesty's Government:
	Whether the Iraq Survey Group is accountable to the British Government; and, if so, how this is reported to Parliament.

Baroness Symons of Vernham Dean: My Lords, the Iraq Survey Group (ISG) is not part of the Coalition Provisional Authority. It is part of the United States-led military forces in Iraq and is therefore accountable to the United States Administration. British personnel seconded to the survey group are under the tactical control of the United States' commander. They are under the operational command of and accountable to the United Kingdom Chief of Joint Operations and thus to Her Majesty's Government. On reporting, the findings of the group are available to the coalition partners, including our own Intelligence and Security Committee, which will have access to the full text of the ISG interim report.

Lord Wallace of Saltaire: My Lords, can the Minister confirm that the second-in-command of the ISG is a British brigadier, that the second largest component in the ISG is British and that David Kay in his interim report to a joint meeting of four congressional committees referred to the ISG as "a joint operation" of the coalition partners; that is, the United States, Australia and the United Kingdom? Is this a joint operation which, nevertheless, is entirely American?

Baroness Symons of Vernham Dean: Indeed not, my Lords. I believe my Answer was very clear. I have been extraordinarily careful in the drafting of this response for the purposes of accuracy. The noble Lord, Lord Wallace of Saltaire, is right; the second-in-command is British. He is right that there are about 60 to 100 British personnel involved in the ISG. Numbers vary; in the whole operation there are about 1,300 or so. Indeed, this is a joint operation and the reporting is as I have indicated to your Lordships.

Lord Astor of Hever: My Lords, in the light of the White House request for a further 600 million dollars on top of the 300 million already spent, what is the total UK contribution?

Baroness Symons of Vernham Dean: My Lords, I am not in a position to give your Lordships an idea of the total UK monetary contribution. Our contribution in terms of participation in and support for the survey group has been predicated not only on our sharing relevant findings but on having operational input and offering advice on strategy through the appropriate channels. I shall do my best to obtain a monetary figure for your Lordships and place a copy of my response to the noble Lord in the Library of the House. However, this is not purely a monetary issue; it is also about participation.

Lord Roberts of Conwy: My Lords, will the interim or final report be made available to this Parliament?

Baroness Symons of Vernham Dean: My Lords, I have asked for a copy of the interim report to be placed in the Library of the House. The interim report is also available on the Internet. It can be found at www.cia.gov. If the noble Lord wants to look that up he is now in a position to do so. However, he need not go to that trouble because I shall ensure that a copy is placed in the Library of the House.

Lord Wallace of Saltaire: My Lords, I note that on 5th June, Sir Jeremy Greenstock, then Her Majesty's representative at the United Nations, announcing the setting up of the ISG, stated,
	"we the coalition provisional authority on the ground, are instituting the work of the Iraq Survey Group to carry out the business of investigation on the ground".
	Does that not imply that the British Government are very much part of a joint operation for which the Government should be responsible to Parliament?

Baroness Symons of Vernham Dean: Indeed, my Lords, but I do not think that what Sir Jeremy Greenstock said goes against what I have said. We are participating by way of our input to and strategic support for the ISG. However, as a matter of accuracy it is not part of the Coalition Provisional Authority. I am bound to tell your Lordships that in the end it really does not make a great deal of difference because a version of the report will be placed in the Library. The full report cannot be placed in the Library—noble Lords would not expect that to be the case—because if published it would jeopardise the security of personnel on the ground in Iraq. However, it will be available to the ISC and I am assured that that will reflect the availability of the report to the equivalent committees in the United States.

Alcohol: Binge Drinking

Lord Turnberg: asked Her Majesty's Government:
	In the light of the Strategy Unit's recent report about the adverse effects of "binge" drinking, what practical steps they are taking to combat heavy alcohol consumption.

Lord Bassam of Brighton: My Lords, the interim analytical report published by the Prime Minister's Strategy Unit in September highlighted the scale of alcohol misuse in England. The National Alcohol Harm Reduction Strategy for England will be published later this year and will contain measures to tackle the range of harms caused by alcohol misuse, including binge drinking. As this is a devolved issue, the governments in Scotland and Wales are also working in this area and the Strategy Unit is in close touch with them.

Lord Turnberg: My Lords, I am grateful to my noble friend for that response. I commend the Government for taking this matter seriously. The burden of heavy alcohol consumption on society and health is very serious indeed. It is enormous and costs several million pounds per year. With one in three men and one in five women drinking beyond the recommended safe limits, it is a particular problem.
	Does the Minister agree that among the several measures which need to be taken, one simple one would be the labelling of alcoholic drinks with recommended safe limits? Does he also agree that the practice of some Premier League football clubs of marketing their own brand of alcoholic drinks, including whisky, sends quite the wrong message to the young?

Lord Bassam of Brighton: My Lords, the noble Lord makes two very important points. These are issues to which the strategy unit will undoubtedly return when it produces its final report. Given the state of some parts of the football industry, far be it from me to suggest that football clubs relinquish any revenue through promotions, but this is an issue which needs to be addressed.

Lord Walton of Detchant: My Lords, is the noble Lord aware of the recent disturbing report by a distinguished gastro-enterologist, Dr Christopher Record, in Newcastle upon Tyne of a marked increase in the number of young women suffering from liver damage as a consequence of high alcohol consumption; such young women being under the misapprehension that they are safely able to drink as much as young men? What action will the Government take to target that particular vulnerable group?

Lord Bassam of Brighton: My Lords, we are well aware of the vulnerability of all in our society to excessive drinking. This is one of those issues on which we shall have to make recommendations, particularly in terms of health promotion and of encouraging moderate and sensible drinking.

Viscount Bridgeman: My Lords, this problem cuts across three departments: the Home Office, the Department of Health and the Department for Culture, Media and Sport. Does that not indicate the need for joined-up thinking across those three departments? Will the Government consider setting up such a committee?

Lord Bassam of Brighton: My Lords, I would go a little further than the noble Viscount and suggest that this subject touches more departments than he indicated. I refer, for instance, to the Office of the Deputy Prime Minister, which has important liaison with local authorities. I think that the Department of Transport and the Department of Trade and Industry would have something to say. Yes, we are well aware of the need for joined-up thinking. That is precisely why the Strategy Unit was placed in charge of producing a report and a strategy across government. For those reasons, all of those departments have been involved in discussion and consultation to produce the interim report and no doubt will be involved in discussions to provide the background for the final strategy report.

Lord Avebury: My Lords, rather than waiting for the report of the Strategy Unit, why do the Government not set a good example by reducing the consumption of alcohol at their own social occasions? Is the Minister aware that I have been unable to discover by means of Questions how much alcohol is consumed by government departments when they act as hosts, and that the Prime Minister refused to answer a letter I wrote to him asking for the drinks bill of 10 Downing Street?

Lord Bassam of Brighton: My Lords, I was not aware of that. I am grateful to the noble Lord for his advice and information on this matter. Clearly, it is important for us all in politics to set a good example as regards drinking, but not to moralise.

Baroness Masham of Ilton: My Lords, now that more women are going into the Armed Forces and trying to compete with men, how much education is given to women about the dangers of binge drinking and competing with men?

Lord Bassam of Brighton: My Lords, I could not put a quantity on that. I would have thought that it makes good sense in educational terms that those in government and in public life ensure that we make everyone in society aware of the dangers of binge drinking. This is a very important issue. It is for that reason that the Strategy Unit was given the important job of looking at ways in which we can improve public information on the subject. I am most grateful to the noble Baroness for her comments.

Viscount Falkland: My Lords, does the noble Lord agree that the term "binge drinking" has been somewhat misused? It usually relates to licensing arrangements of one kind or another, and we have a change imminent. In fact binge drinking—to anyone who knows anything about the history of this country—has been part of our drinking habits for hundreds of years. It is a cultural matter: people drink to get drunk very quickly. In Italy, for example, they do not do so. So a great deal of education in cultural change is needed. That takes a long time. Do the Government have any plans to address that particular aspect of the issue?

Lord Bassam of Brighton: My Lords, I simply say to the noble Lord that he would find it useful, if he has not done so already, to look at the Strategy Unit's interim report. It seeks to address exactly that issue. The noble Lord makes a good point; that the culture that surrounds drinking varies across countries. One issue of concern, certainly here, has been binge drinking associated with the drinking-up period in public houses.

Baroness Gardner of Parkes: My Lords, the point made by both the noble Lord, Lord Walton of Detchant, and the noble Baroness, Lady Masham, was about women competing with men. In the past we have again and again had very good health warnings explaining that women can drink only half the quantity of alcohol that men can. Why is it that we are no longer getting the same amount of health education on this point?

Lord Bassam of Brighton: My Lords, with respect, we are pumping out a great deal of information. The Government spend about £100 million per year on treatment and advice on problems associated with alcohol abuse. We shall continue to do that. As I have said on many occasions during this series of exchanges, part of the purpose behind the Strategy Unit's report is to ensure that we get that message over because we obviously need to repeat it and to ensure it gets to the right place.

The Earl of Onslow: My Lords, does the Minister agree that we drink rather less than the French? In my youth there was an advert in the French underground, which stated, "Jamais plus d'un litre de vin par jour", which was put up by M. Mendes-France, the then Prime Minister. For the Labour Front Bench, who possibly do not speak such appalling French as I, that means, "Never more than one litre of wine a day". But that is an enormous amount of wine to drink. Even our binge drinkers on average do not drink that much. Is he also aware that when Garibaldi's British contingent went to Italy, they had to be sent back for binge drinking because they always got totally off their trolleys? There is nothing new about the British behaving in this disgusting way.

Lord Bassam of Brighton: My Lords, I am always taken apart by what the noble Earl has to say on these matters. He has great historical knowledge and wisdom in that respect. I was not there during the time of Garibaldi and did not have the good fortune to read the adverts on the Paris Metro, but I think that we must take binge drinking seriously. It is a serious subject, even in your Lordships' House.

Lord Dholakia: My Lords, does the Minister accept the figure produced by the British Crime Survey that 40 per cent of serious crime in this country is committed by people while under the influence of alcohol? Could he identify whether specific projects are being run in our prisons to address that particular problem?

Lord Bassam of Brighton: My Lords, the noble Lord is right: it is undoubtedly the case that alcohol has a very important relationship with acts of disorder in our community and society. It is for that reason that the Government have taken swift and keen action with their range of anti-social behaviour measures. I agree with the noble Lord that it is important that prison education includes an element on abuse of drugs and drink.

Northern Ireland Assembly: Elections

Lord Smith of Clifton: asked Her Majesty's Government:
	Whether elections will be called to the Northern Ireland Assembly, in view of the shortage of time now available to the Secretary of State in which to announce a date for such elections.

Baroness Amos: My Lords, as the Prime Minister said yesterday in another place, we accept that elections to the Northern Ireland Assembly should go ahead, but it is much better that they do so on a basis which offers a real prospect of resumed devolved government. Intensive discussions have been continuing between the Government and political parties with that object in view.

Lord Smith of Clifton: My Lords, I am slightly disappointed because statements by the Government are beginning to get all the credibility of a Billy Bunter postal order. Does the Minister agree that procrastination of this kind is now leading to a very serious loss of momentum in the political process in Northern Ireland, not least as permanent staff are leaving Stormont because of the hiatus? Does she also agree, as the Government espouse, that elections really must be held in the very near future?

Baroness Amos: My Lords, I think the noble Lord will accept that this is a very sensitive time with respect to the discussions in Northern Ireland. We want to see Assembly elections go ahead as soon as possible, but it is much better that those elections go ahead on a basis which offers a real prospect of resumed devolved government. That is why intensive discussions have been continuing between the British and Irish Governments and the political parties. That is our objective.

Baroness Park of Monmouth: My Lords, can the Lord President of the Council tell the House what progress has been made in the work of the Monitoring Commission, which was set up, as I understand it, to secure the acts of completion on both sides, which were regarded at that time as a prerequisite of any return to government by the Assembly?

Baroness Amos: My Lords, work is ongoing with respect to the Monitoring Commission. The noble Baroness will know that the political parties in Northern Ireland have had differing views on this issue. I shall check the latest position, and will write to the noble Baroness if there have been any improvements to the Answer that I have given.

Lord Molyneaux of Killead: My Lords, given the importance of these decisions, particularly in regard to the dates of the election—which, after all, I need not remind your Lordships were decided by this House—would it not have been prudent to have invited all the political parties in Northern Ireland to join in, and not just two of them, given that one of the partners in the discussion is a sovereign independent nation?

Baroness Amos: My Lords, I take the noble Lord's point. We stay in touch with a range of political opinion. The SDLP met with the Prime Minister last week. My right honourable friend the Secretary of State for Northern Ireland saw a range of pro-agreement parties during the past week. I must say that it is right that we should try to facilitate the process of building trust and confidence and in particular an end of paramilitary activity. Our efforts are directed towards that.

Lord Glentoran: My Lords, I, and certainly my party, agree with the noble Lord, Lord Smith of Clifton, and the Government that elections must happen. If they do not happen soon there may never be elections for devolution again. What kind of programme do the Government have? Are they thinking of having elections and maybe not summoning the Assembly until Sinn Fein/IRA has delivered? The Prime Minister, my party, the Ulster Unionist Party and others have demanded that before Sinn Fein is admitted into the Executive, it must deliver that which we all understand as total decommissioning and a total end of the war. Perhaps the noble Baroness can help me on that issue.

Baroness Amos: My Lords, the noble Lord will understand if I am not able to answer directly the question with respect to a programme and to give details of it. My right honourable friend the Prime Minister said on Monday that we believe that the omens for progress are good. We will continue to work towards the goal of elections to restored institutions. Intensive discussions are happening to deliver that end. I am sure that the House will understand that I cannot speculate further on the potential timing of an election while we are at such a sensitive stage of discussion.

Lord Hylton: My Lords, does the Leader of the House agree that it is essential that all paramilitary groups disarm and cease using terror tactics?

Baroness Amos: My Lords, as the noble Lord is aware, we have been working towards ensuring that paramilitary groups give up their weapons. That is a key part of our strategy.

Health and Social Care (Community Health and Standards) Bill

House again in Committee.
	Clause 40 [The Commission for Healthcare Audit and Inspection]:

Earl Howe: moved Amendment No. 209:
	Page 15, line 33, after "the" insert "Independent"

Earl Howe: In moving Amendment No. 209, I shall speak also to rather a lot of other amendments. I do not know whether it would be for the convenience of the Committee if I read them out, but I shall take them as read: they are the amendments listed in the group.
	We move with, I suspect, something of a sense of relief to Part 2 of the Bill and the issues relating to the creation of the new Commission for Healthcare Audit and Inspection and the Commission for Social Care Inspection. I begin by once again making clear that, in broad terms, we welcome what the Government are doing by creating those bodies. Indeed, we have long advocated that the acute sector of the NHS and acute private hospitals should be subject to the same inspection and monitoring regime and the same set of quality standards. Bringing together the existing Commission for Health Improvement and the relevant functions of the National Care Standards Commission is a decided step forward. But those new organisations need to be set up correctly.
	One of the main themes of our debate during this part of the Committee's proceedings will be the need to ensure that both CHAI and CSCI are truly independent in their operation—independent, that is, from Ministers, government and Whitehall. The amendments to add the word "independent" to the names of the two bodies are symbolic of that theme, but they are also intended as signposts to wider and deeper issues. The independence of CHAI and CSCI must be a cardinal feature of how each body performs its functions. In particular, I shall be arguing that each should be the guardian of the standards that it promulgates.
	If both bodies are to command public confidence, they should not be seen as mere tools of government. Regrettably, that is how CHI, for all its splendid people, is sometimes perceived. The star rating system is one example of that. It was introduced by the Government as a means to rank NHS trusts against each other. The system has been discredited, but it is CHI that must implement it at the Government's behest.
	It will occasionally be necessary for CHAI and CSCI to speak out and be critical of government. The precedent of the Audit Commission, part of the functions of which are being absorbed into CHAI, is valuable. I am well aware that being criticised is uncomfortable for Ministers, but it is healthy and we should not fight shy of it. That measure of independent action on CHAI's part requires it to be independent on several levels: operationally, financially and in the manner of its executive appointments. We have tabled amendments to address all three of those levels. Earlier this year, there were distinct signs that Ministers wanted to water down previous guarantees of CHAI's independence. I state in the clearest terms that any such watering down is unacceptable.
	Turning briefly to other amendments in the group, under Schedule 6 there are various provisions for the Secretary of State to involve himself with the people who will be running CHAI. He appoints and removes the chairman and members under Paragraphs 3(1) and 3(2); he can make regulations about the appointments and removals from office under Paragraph 3(5); and he can set pay, pensions and compensation for loss of office under Paragraph 4. There are similar provisions relating to CSCI in Schedule 7.
	Several of my amendments in the group would replace the Secretary of State with the NHS Appointments Commission for CHAI; others would do the same for CSCI. They refer to the special health authority designated to perform the appointment functions for the regulator, CHAI and CSCI under the new clause relating to the regulator that we debated during our first day in Committee. That is probably the NHS Appointments Commission, but a special purpose health authority could be set up. The important point is that the appointer is not the Secretary of State.
	It may appear unusual for pay and pensions to be settled by the appointments commission. Again, it would be possible to set up a more independent mechanism. The important point is that real distance should be placed between the Secretary of State and the chairman and members of CHAI and CSCI. That is the purpose of the amendments. I beg to move.

Baroness Barker: I shall speak to Amendment No. 211 and the following amendments in the group. I echo what the noble Earl, Lord Howe, said. The Committee will recall that early last year, when the then Secretary of State, Alan Milburn, talked about setting up CHAI and CSCI, he undertook that they would be no less independent than the Audit Commission. Reading this part of the Bill, one must question that, and do so in some detail. Hence the number of amendments to this part tabled in my name and that of my noble friend Lord Clement-Jones, who I believe told Members of the Committee that he is unable to be in his place this afternoon.
	The noble Earl is right to home in on the detail of the composition and operation of the regulatory bodies. As it stands, the Secretary of State retains to himself the power to hire and fire those who will have the most key roles of oversight of the work of foundation trusts and private hospitals. That is unacceptable, so we seek to remove some of those powers from the Secretary of State and, under later provisions, place them within the body of CHAI.
	To reflect on some of our earlier debates, the reason we feel so strongly that those bodies must have real distance and independence from the Secretary of State is because of the doubts that have been expressed about the governance, accountability and arrangements of foundation trusts. Within that unsure framework, there needs to be a truly robust and independent body with strategic responsibility to consider critically and in an unfettered manner the performance of those hospitals. Therefore, and with some force, on one of only a few occasions under the Bill, we have common cause with the noble Earl, Lord Howe.
	I hope that the Minister will understand that the measures are placed within the whole context of the operation of health and social care in future. They do not simply reflect our distaste for any particular incumbent at the Department of Health.

Baroness Finlay of Llandaff: I, too, support this group of amendments and have added my name to one of them. The arguments for the independence of the inspectorates have been well stated and I shall not repeat them. However, it has struck me that they will have two crucial roles. One will be to inspect, report, identify problems and where things are going well and to provide appropriate feedback. The other, linked but separate, will be to drive up standards in those areas where they identify a deficit for whatever reason—I stress those words. There may be complex reasons. We have had some inquiries that we all wish had never been needed, but behind the problems were complex faults detected in the system. It will be only through rigorous independence that the inspectorate bodies will be able to ask the questions that really need to be asked, to identify the deficits in standards and be able to drive up standards of care.
	From all we have heard so far, all the Government's improvements to date have been to drive up standards. I cannot see what there is to fear from independence, but there is much to be feared in an accusation that an inspectorate body is somehow in the control, pay or influence of the political arena.

Lord Hunt of Kings Heath: I declare an interest as a member of the advisory board of the new CHAI, which has begun to meet over the past few months. I understand the points raised by Members of the Committee about the need for the two bodies to be independent and to be seen as such. They are absolutely right. Their role and responsibility for checking quality is awesome. The impact of their reviews can lead to major changes, such as the loss of jobs of senior executives and non-executives. Their relationship to performance ratings is critical. In addition, they are in a position to make more general judgments about the success or not of policies being developed in the health and social care area.
	I disagree with Members of the Committee in so far as my experience of the existing CHI is that it is robustly independent. I was the Minister responsible for dealing with CHI for three years. I found it all too independent and robust. At times, I have criticised the approach taken by CHI and the review teams. That is absolutely right, as it was a visible indication of the very independence of Peter Homa, Deirdre Hine and the other commissioners. This is not a theoretical discussion. We can consider at least three years' experience of an organisation. Nobody has brought evidence to your Lordships' House to suggest that CHI has been anything other than robustly independent. Anybody who knows the character of Ian Kennedy, the chair designate of the new CHAI, or Denise Platt, the chair designate of CSCI, could doubt their robustness and independence. I have no doubt that we will see from them extraordinarily good work that is wholly independent.
	I must take the noble Earl to task on his comment on performance ratings, which he said were now discredited. They are not discredited. They may not be perfect, and nobody would claim that, in their first year or two, they were 100 per cent perfect. But they give a very credible measurement of the overall performance of individual NHS trusts. I doubt that any Members of the Committee would detract from the strengths and abilities of any of the trusts going forward to foundation trust status. They are some of our best organisations. Their star-ratings contain both key targets and a huge number of benchmark indicators. Of course they need to be refined; that will happen. It would be wrong to suggest that the credibility of the star-ratings has been undermined in any sense in the way that the noble Earl has suggested.
	No doubt my noble friend will have something to say on the third issue raised, the appointment of the chair and commissioners. I put it to the noble Earl that, if the Government were concerned to put into those positions people who would simply do what they were told, would they really have appointed Sir Ian Kennedy or Denise Platt?

Baroness Finlay of Llandaff: The noble Lord, Lord Hunt, has given powerful arguments for independence and stated rightly that the people appointed are of independent mind and spirit. I am not sure, therefore, why he is fearful of adding the word "independent" into the Bill. When those people leave office, we need to ensure that that tradition is maintained.

Lord Hunt of Kings Heath: It is because I have always listened to noble Lords explain on many occasions in your Lordships' House that we should not seek to add unnecessary words to Bills or to lengthen them unnecessarily. It would be extraordinary to suggest to the appointees that adding the word "independent" to their title will somehow change the nature and philosophy under which they operate. We should think better of them.

Baroness Howarth of Breckland: I am not sure whether I support the amendment. I wish to explain why, and to build in a few questions. I do not know what is meant by the term "independence" in relation to the two bodies. I declare an interest as the vice-chair of the National Care Standards Commission. However, what I have to say is entirely my own. I do not seek to join the new commission, so I feel very free in making my own comments.
	Independence seems to mean different things in different places. Unless we have that more clearly specified—some of the amendments may propose to take that through—we might run into difficulties. For example, non-departmental public bodies, non-ministerial departments and even economic regulators are subject to financial control. But the way in which that budget is set, how representations are received in the public spending reviews and whether the Minister will make sudden cuts in assigned budgets—that has happened to some independent regulators—will affect how that independent regulator can carry out its task.
	That accountability may well have a political perspective. The noble Lord, Lord Hunt, mentioned in an earlier debate that some issues will always have political outcomes—it is in the nature of the beast. I give standards for registration in old people's homes as an example. Independent regulatory agencies are given powers over regulation but are also subject to controls by elected politicians through those standards. How those standards can be interpreted and what freedom they have will also affect the nature of independence. Indeed, standards as a whole may be handed down from the Department of the Health to the regulator for implementation, with little room for flexibility, where the regulator might see better ways of, say, acting proportionately in achieving an aim.
	The nature of the relationship between the regulator and the relevant department is usually set out in a management statement that includes how the regulator will receive rules and guidelines relevant to the exercise of the regulator's functions, including how the regulator is to be held to account for its performance. We must remember that the regulator, however powerful the personality, must be held to account.
	Will the Minister say whether that will be the mechanism for the agreement between new CHAI and CSCI and the departments, and whether it will give detailed instruction or broad direction for the new regulators?
	This week saw the launch of the new report by the Better Regulation Task Force on independent regulators. I commend it to all Members of the Committee. The question of complexity, and sometimes duplicity, contained in the word "independent" emerged throughout the discussion. Do the Government have a clear definition of independence? That would help me to know where I stand in this debate.

Lord Warner: I share the noble Earl's pleasure at moving to Part 2 of the Bill. It is appropriate that we should celebrate with such a bumper group of amendments to discuss. Phonetically, the amendments would mean that CHAI would become "itchy" in shorthand. I wonder whether Sir Ian Kennedy and his colleagues would thank us if we agreed to such amendments. In particular, as I shall suggest, they would add nothing in legislative terms. A name does not guarantee independence. The Bill ensures that both CHAI and CSCI will be more independent of government than the bodies from which they are formed; namely, the Audit Commission, CHAI and the National Care Standards Commission. The acid test of CHAI and CSCI's independence will be how independently they behave in the discharge of their functions and how they report to Parliament.
	On Amendments Nos. 211 and 235, we have made it clear that we are committed to ensuring the independence of CHAI and CSCI. I am grateful to my noble friend Lord Hunt for his excellent statements in support of our position, which, I think, accurately describe what we are about. However, the Secretary of State must continue to be accountable to Parliament for the work of both inspectorates. In keeping with that principle, the Bill must provide for the Secretary of State to have limited—and I emphasise limited—checks and balances on how both organisations perform their functions.
	The Bill currently contains powers in Clauses 51 and 78 to require CHAI and CSCI to carry out an inspection of any particular body or service. The Bill gives the two inspectorates a high level of discretion about how they exercise their functions, so the Secretary of State will not be able to influence how they exercise them day to day. However, the Secretary of State remains responsible for the health and social care services that they are inspecting and might need to ask them to carry out a review of a particular authority or service if concerns are raised. For example, such a power would be used when there were considerable concerns about a local authority's child protection services, such as those raised by the case of Victoria Climbie. It is therefore important for the Secretary of State to be able to exercise this function in a speedy manner when the need arises.
	CHAI and CSCI will be markedly more independent than other inspectorates with a like remit. In particular, most other NDPBs, such as the Audit Commission, can be directed by Ministers about any matter. The Bill does not include such a power for CHAI or CSCI and instead gives both inspectorates a very wide discretion on how they exercise their functions, allowing the Secretary of State to direct the inspectorates only in certain limited circumstances. For example, it would be unprecedented for legislation setting up an NDPB not to include direction-making powers that the Secretary of State could use if the organisation were seen to be failing to exercise its functions properly—hence the specific rather than general provision in Clauses 130 and 131.
	It is important that the Secretary of State can give a general direction on matters of government policy to which the inspectorates must have regard—a requirement to comply with proper procedures of good government accounting, for example—hence, again, the specific provision in Clauses 128 and 129. The same power to make directions to have regard to government policy applies to Ofsted, and I doubt whether noble Lords would regard Ofsted as a body that lacks independence.
	Finally, it is important that the Secretary of State can ensure that the criteria and standards which the inspectorates will use to review NHS and local authorities are fair to the bodies being inspected and reflect national standards, to which we will come at a later stage. Hence the specific requirements for the Secretary of State's consent to the inspectorate's criteria in Clauses 49, 59, 77 and 83.
	The Bill includes other provisions that will emphasise the independence of the bodies, including provisions to: enable the Secretary of State, or the National Assembly in Wales, to delegate the function of appointing the chair and other commission members of both inspectorates to the NHS Appointments Commission working to Nolan Principles; give the chair and commissioners considerable security of tenure so that they may be removed only when they are deemed unfit or unable to perform their functions; and to provide for the appointment of CHAI and CSCI chief executives by the commission members themselves. I recall that, in the case of the Audit Commission, there must be government approval of the chief executive. There are therefore real differences between the new bodies and some existing bodies that are accepted on all sides of the House to be perfectly independent.
	Other provisions require both commissions to make an annual report direct to Parliament, or the National Assembly for CHAI, on the state of health and social care in England, or Wales in the case of CHAI. The only direction and regulation-making powers in the Bill are those that we believe to be absolutely essential, for the reasons I have given. Noble Lords will have the opportunity to scrutinise any regulations when they are laid before Parliament.
	Members of the Committee have expressed concern about the regulation-making powers that will allow the Secretary of State to approve the criteria that CHAI and CSCI draw up. It is important to be clear that the commissions themselves will be fully responsible for drawing up the inspection criteria. However, it must be right that the Secretary of State, who retains parliamentary responsibility for the work of the commissions and for drawing up national standards, ensures that the criteria and standards themselves fit together. We do not want to create a situation for the NHS in which the standards and criteria do not fit. That would cause a great deal of difficulty for people throughout the country who are being inspected against criteria that measure performance against national standards.
	We would not wish to place a specific duty on CHAI to have to consider requests to undertake reviews and inspections at the behest of all and sundry, which is effectively what Amendment No. 292 would require. We would want CHAI to concentrate on its core job. Within that, it is appropriate for the Secretary of State to be able to request CHAI to undertake additional reviews or investigations when there are serious concerns.
	Turning to the issue of appointments, I remind Members of the Committee that Clause 183 enables the Secretary of State to delegate responsibility to the NHS Appointments Commission for all or part of his function of appointing members to public bodies that have functions relating to health and social care or the regulation of professions associated with health or social care—including CHAI and CSCI. In addition, Clause 183 and Schedule 12 also permit the appointment of lay members of health profession regulatory bodies. In that context, as we have already said, there are good reasons for deciding that public appointments are not automatically delegated.
	Some of the differences expressed by Members of the Committee have arisen because we have not given an undertaking to delegate everything. We have created a capacity to do that, but we are reserving appointments or certain aspects of appointments in particular cases to the Secretary of State. The Government believe that that is sensible.
	In some cases, Ministers may wish to delegate the initial selection and sifting processes but not the final appointment itself, or Ministers may wish to retain direct responsibility for certain appointments, or take back responsibility for appointments. We have tried to create some flexibility to take account of all sets of circumstances. However, I repeat what I have said on previous occasions. The Government envisage that the overwhelming majority of national appointments for which the department is responsible will be delegated to the NHS Appointments Commission, with only a small proportion of appointments being made directly by the Secretary of State.
	Examination of what the Government have been doing shows that they have moved in this direction far more than previous governments were willing to do. If noble Lords need to judge us in terms of our future behaviour, our past behaviour should be examined, and that has been to give away a great deal more of the appointment functions in the health service than previous governments have been prepared to do. The position regarding CHAI and CSCI has already been made quite clear. The Government are committed to delegating all stages of the appointments processes for both bodies to the NHS Appointments Commission for both chairs and non-executive members. Ministers will not be involved, other than—this is important—in setting the criteria against which candidates are judged.
	Some of the amendments would confer inappropriate functions and powers on the NHS Appointments Commission, rather than on the Secretary of State. In particular, Amendment No. 243 would require the Secretary of State to obtain the consent of the appointments commission before making any regulations for the appointment of the chairman and other members. It would be inappropriate for the Secretary to State to have to ask the appointments commission whether he could make any regulations.
	The function of the appointments commission is to make appointments to CHAI, CSCI and others and to remove persons from office in specified circumstances. It is not a function of the commission to become directly involved in the making of detailed regulations about the conditions of appointment. We should not seek to burden a body that is intended to carry out recruitment and appointment in that way. Amendment No. 242 would allow the commission to make the regulations. That is neither legally possible nor appropriate.
	Amendments Nos. 220, 244 and 245 would place the decision about whether an individual should be suspended from office in the hands of the appointments commission, rather than the Secretary of State. It is consistent in a wide range of bodies that that function is in the hands of the Secretary of State. It is he, not the NHS Appointments Commission, who will be responsible for CHAI and CSCI and will, therefore, be held accountable to Parliament for their actions, if there is a problem. In special circumstances, it may be necessary to act quickly. We have discussed those issues before.
	Amendment No. 468 seeks to make it clear in the Bill that appointments to CHAI and CSCI can be delegated. That is not necessary, for the reasons that I gave.
	Amendments Nos. 223 to 230, 249, 251 and 252 would have the effect that the appointments commission, not the Secretary of State, would be responsible for determining the remuneration, other allowances and pension to be paid to the chairman and other members of CHAI and CSCI and any compensation payable, if there were special circumstances that made it right for a person for hold office. The noble Earl made much of the importance of those functions. It is proper that the functions should belong to the Secretary of State, as he sets the overall budget for CSCI and CHAI and, in consultation with the inspectorate, can ensure that the remuneration paid to the chair and other members is appropriate and proportionate. What is being asked for is simply not normal practice for such bodies.
	I should have responded to the noble Baroness, Lady Howarth of Breckland. I do not think that, at this stage, we want to bring the Secretary of State into protocols on joint working. The convention with inspectorates of all kinds is that Ministers do not engage themselves in the joint working arrangements between bodies. That is best left to the good sense of the bodies themselves, in which we have great confidence, to organise joint working protocols.

Earl Howe: I am not sure that the Minister has quite answered the question asked by the noble Baroness, Lady Howarth of Breckland, about the definition of "independence". In my book, it simply means "free from political interference"; that is what I think of as independence.
	Nothing in my remarks was intended to impugn Sir Ian Kennedy or anyone else. That was not the point. My point was that the Bill was formulated in such a way that, when it suited the Government—this Government or any other—CHAI would be allowed to get on with its job and, when it did not suit the Government, the Bill allowed Ministers considerable scope to interfere. The powers are widely drawn.
	Individual appointments—current or future—are not the issue. The Bill sets out legally binding ties to government. The Minister went through several of them. I see no virtue in anticipating debates on subsequent clauses—for example, Clauses 128 and 130, which relate to CHAI, or Clauses 129 and 131, which relate to CSCI. We will come to those, and they are important. Similarly, we should reserve for a later moment our debates on performance ratings, standards and criteria.
	We have suggested that the word "independent" should be added to the names of the bodies. If the word is so superfluous, one must ask why the Government thought it a good idea to have "independent" as an epithet for the regulator. I imagine that the Government's intention was to make a declamatory statement, as it were, about what the post of regulator was all about. I have no problem with that. The Minister said that CHAI and CSCI would be more independent of government than the current bodies are. We will need to test that proposition as our debates proceed. To my mind "more independent of government" is not the same thing as "independent of government".
	It has been a useful debate, and I thank all noble Lords who took part. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 210 to 212 not moved.]
	Clause 40 agreed to.
	Schedule 6 [CHAI: Supplementary]:
	[Amendments Nos. 213 to 218 not moved.]

Lord Warner: moved Amendment No. 218A:
	Page 130, line 38, after "that" insert "one of"

Lord Warner: The amendments are technical by nature and have been proposed by parliamentary counsel. I will go through them as briefly as possible.
	Amendment No. 218A will make it clear that one of the conditions of conduct, as opposed to all of them, may apply before the Assembly can remove the person from office. Amendment No. 222A changes Schedule 6 to make it clear that the Assembly must consult the Secretary of State before carrying out the appointment and removal of the CHAI member whom it appoints to represent the interests of Wales under paragraph 3(1)(b). The Committee will know that we have already made clear our intention that, in practice, the Secretary of State and the Welsh Assembly will delegate the power to a special health authority, namely the NHS Appointments Commission, which will appoint to the positions according to Nolan principles.
	The amendments reciprocate the current provision for the Secretary of State to consult the Assembly before appointing other members to or removing them from CHAI, as specified in paragraph 3(7).

Lord Roberts of Conwy: Is the special health authority a joint England and Wales body?

Lord Warner: I believe it is, but I shall check that and confirm it for the noble Lord.
	Amendments Nos. 232A and 253A correct a typographical error in sub-paragraph (3) to make it clear that the Assembly may in the prescribed manner remove from office the person appointed by it under sub-paragraph (1)(b) if, and only if, it is satisfied that one—rather than all—of the conditions specified in sub-paragraph (4) applies. The conditions are that the appointee is unable or unfit to carry out the duties of his office, has failed to carry out the duties of his office or has become disqualified from holding office.
	Amendments Nos. 253B and 253C amend Schedule 8. The schedule states that property rights and liabilities can be transferred from the Crown to CSCI, for instance in relation to property and other assets currently used by the SSI as part of the Department of Health. It does not make the same provision for CHAI. Amendment No. 253B will mean that the scheme may also transfer property rights and liabilities from the Secretary of State to CHAI, should that prove necessary.
	Amendment No. 253C would allow transfer schemes under Schedule 8 to provide for compensation for any other person or body who is adversely affected by any such scheme. Such compensation might be paid, for example, where it was necessary for a contract with a service provider to be terminated early because it was no longer required by the new commission. We do not anticipate there being many instances where compensation would be paid, but it is important to have the provision to cover a situation where the rights of third parties are shown to be adversely affected.
	Amendments Nos. 335C and 361A are technical government amendments in nature and were suggested by parliamentary counsel. Under Clauses 67, 73, 89 and 99, regulations may provide for CHAI, the Assembly or CSCI, as appropriate, to require prescribed persons to provide an explanation of any documents or information that the inspectorates obtain in exercising their relevant powers or of any matters which are the subject of the exercise of any functions of the inspectorates.
	The Bill currently provides that those regulations may require explanations to be provided at times and places set out in the regulations. That is to ensure that it would be possible to require explanations to be provided in person, as opposed to in writing, which will sometimes be appropriate, particularly where the inspectorates come across conflicting data in the course of exercising their functions. We are using regulations in this matter to ensure that they compliment the intended methodologies, inspection processes and performance assessment regimes of inspectorates and the Assembly. The regulations will be subject to parliamentary scrutiny in the normal way before they come into effect.
	Amendments Nos. 384B, 384C and 396A to 396E are technical drafting amendments to correct incorrect references to the Commission for Local Administration. As drafted, the clauses provide for complaints to be referred to the "Commission" for Local Administration, whereas, under Part 3 of the Local Government Act 1974, referrals need to be made to a,
	"local Commissioner who is a member of the Commission".
	The amendments simply correct that in the text of Clauses 112 and 114.
	Amendment No. 408A amends the Superannuation Act 1972 by adding CHAI and CSCI to the list of bodies that can admit members to the Principal Civil Service Pension Scheme. We want to ensure that certain staff who transfer to CHAI and CSCI do not suffer any detrimental effect by having less favourable pension arrangements.
	Members of the Principal Civil Service Pension Scheme, such as those individuals who currently work in the Social Services Inspectorate, would be able to remain members of that scheme upon transfer. That will ensure that their terms and conditions of service are protected on transfer of employment to the new commission. Staff members who were previously members of the Audit Commission pension scheme will be able to join the Principal Civil Service Pension Scheme because there is no comparable scheme to their current one.
	You will be pleased to know that, finally, Amendment No. 408B corrects an omission from the minor and consequential amendments in Schedule 9. It amends Section 55 of the Care Standards Act to ensure that it now refers to CSCI instead of the National Care Standards Commission and to the Health and Social Care Act instead of the Care Standards Act.
	While I am on my feet, perhaps I may correct what I said earlier. The NHS Appointments Commission is not an England and Wales body. I apologise for the slip. I beg to move.

On Question, amendment agreed to.
	[Amendments Nos. 219 to 222 not moved.]

Lord Warner: moved Amendment No. 222A:
	Page 131, line 20, at end insert—
	"( ) The Assembly must consult the Secretary of State before exercising any of its functions under the preceding provisions of this paragraph."
	On Question, amendment agreed to.
	[Amendments Nos. 223 to 231 not moved.]

Baroness Barker: moved Amendment No. 231A:
	Page 132, line 17, at end insert—
	:TITLE3:"Responses to recommendations
	The CHAI must respond in writing to any recommendation which—
	(a) is made by a Committee of either House of Parliament, or a Committee of both Houses, and
	(b) relates to the exercise by CHAI of its functions."

Baroness Barker: We continue on a related matter, which is about the way in which the independence of the new bodies is to be demonstrated and proven. Amendments Nos. 231A, 316 and 346 perhaps lead us away from the rather disappointing debate on the preceding group of amendments about individuals, on to the real basis upon which one can fairly determine the independence of the bodies. Amendment No. 231A requires CHAI to respond in writing to a committee of either House of Parliament about its functions and about carrying them out.
	Amendment No. 316 requires CHAI to provide Parliament and the Assembly with material on the investigations and reviews which it conducts. Amendment No. 346 requires CSCI to provide reports of its investigations to the Comptroller and Auditor-General. I was struck by something said by the noble Lord, Lord Warner, in reply to the noble Earl, Lord Howe, in the previous debate; namely, that the Government do not want these bodies to be required to produce reports for all and sundry because that would distract them from their core jobs.
	The core job of these bodies is to provide public information about the standards and quality of health and social care. I suggest to the Minister that the production of reports in writing is a key means by which they could do precisely that. More than that, they would build confidence in standards of health and social care. It would not be an imposition for Parliament or the Assembly to make such a requirement of a public body: indeed, it would be unusual were there not to be a requirement for them to do so. After all, these bodies are not only providing strategic reports on the overall level of service provision and the adequacies of it, but also, from time to time, they are investigating some of the most serious matters in public life as they affect individuals.
	Those three small requirements on these bodies are not onerous, but they are important. In particular, Amendment No. 346 proposes copies of reports being sent to the Comptroller and Auditor-General about CSCI are an essential part of the data which not only politicians but also the public need in order to make correct and informed judgments about the most important public services in the country. I beg to move.

Lord Warner: Amendment No. 231A seeks to increase CHAI's accountability to Parliament by requiring it to respond in writing to any recommendation of the committees of the House that relates to the exercise of CHAI's functions. Similarly, Amendment No. 316 would place a general duty on CHAI to keep Parliament and the Assembly informed about the provision of healthcare.
	I do not think that any of us disagrees with the principle that the work of CHAI should support Parliament's scrutiny of policy and public services. Clause 126 requires CHAI to produce an annual report about its findings during the year, which is to be provided directly to Parliament. It is already discharging, in writing, that widely drawn responsibility to report on its work.
	Elsewhere in the Bill there is also provision for it to produce and make public reports as they undertake specific studies throughout the year. Therefore, it already provides for written reports to be made available to Parliament and to be put in the public arena. There may be occasions when CHAI might fall within the sights of Parliament or the Health Select Committee. It will therefore be expected to provide such information in such a form as may be requested. However, it would not be right for CHAI to be put under a duty to do so as a matter of course.
	Ofsted has a direct reporting line to the Education and Skills Select Committee, but that is primarily because Ofsted is a non-ministerial department, unlike CHAI and CSCI, which are non-departmental public bodies. They are constitutionally different. It would be inconsistent with well-established precedent for a duty to be placed on the commissions, as non-departmental public bodies, to keep the Health Select Committee informed of matters relating to health and social care services. Of course they will co-operate in the normal way, as would any other body, with parliamentary Select Committees, but I suggest that the amendment would undermine the important principle that the Secretary of State is the person accountable to Parliament for the actions of these commissions.
	Amendment No. 346 has the effect that CSCI, where it conducts general reviews of local authorities or other persons providing English local authority social services under Clause 78, must always send a copy of such a report to the Comptroller and Auditor-General. I do not believe that this amendment is necessary. Clause 78 concerns the general function of review and investigation of social services that CSCI will have. There is no need for the NAO automatically to receive a copy of all reports following such a review or investigation under this clause.
	Of course, when exercising its audit function, the NAO can already request from CSCI any information and reports it deems necessary. In our view, there is sufficient provision for this in the legislation.

Baroness Barker: I thank the Minister for that response. It was helpful to tease out from him the strength and force of some of those other requirements on the two bodies. I would simply say that, particularly in relation to Amendment No. 346, we sought to probe the extent to which the type of reports produced by the Audit Commission would be made available. There is a fair degree of disquiet on these Benches about the extent to which the existing Audit Commission functions will relate to the new bodies. I question whether solely the audit function to which the Minister referred will be sufficient to provide the full strategic information that will be needed.
	None the less, the Minister has been helpful in his reply. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Noakes: moved Amendment No. 232:
	Page 133, line 3, leave out sub-paragraph (5) and insert—
	"(5) The CHAI may borrow money other than as mentioned in this paragraph up to a limit of its annual expenditure for the previous year as shown in its annual accounts less any amounts outstanding in respect of loans advanced under this paragraph."

Baroness Noakes: In moving Amendment No. 232 I shall speak also to the amendments grouped with it. We now come to a group of amendments dealing with the financial side of both CHAI and CSCI. The need for financial independence lies at the heart of the amendments and I shall build on the comments made earlier by my noble friend Lord Howe about the importance of independence.
	I shall speak to Amendment No. 232 shortly, but it may help noble Lords if I begin with Amendment 317, which would give CHAI a basic financial duty, inserted as a new clause before Clause 61. It is not a revolutionary provision; it simply requires CHAI to break even on its income and expenditure account. No reference is made to CHAI's financial duty in the Bill and I hope the Minister will agree that it is important to be clear about the way that CHAI will operate financially.
	The specification of a financial duty is important because Amendment No. 319, which applies to Clause 61, concerns the fees that CHAI may charge. The amendment states that the regulations made on fees by the Secretary of State must ensure that CHAI can meet its financial duty. Amendment No. 320 would achieve the same end in respect of regulations made by the Assembly under Clause 62.
	Amendment No. 232 concerns another aspect of financial independence. It would give CHAI the ability to borrow money other than from the Treasury. This would ensure that if CHAI needed to invest in property or information systems and so forth, it would not be frustrated in that by the Treasury's power of veto. Borrowing money commercially should be a route made available to CHAI in order to keep its independence. I imagine that it would not often want to borrow at the higher rates that would almost inevitably pertain in the private sector, but if the Treasury is intransigent—perish the thought—then the option would be available.
	Amendments Nos. 253, 357 and 358 are mirror images for CSCI of the amendments I have just spoken to, thus ensuring that it, too, would be financially independent. Charging by CSCI is a particularly sensitive issue for local authorities, which are not currently charged by the Social Services Inspectorate. May I put a direct question to the Minister: what do the Government intend in relation to charging local authorities? Is it intended that local authorities should bear the additional costs by way of CSCI fees? The Local Government Association considers this to be an important issue and I hope that the Minister will be able to respond.
	If the Government are unable to accept these amendments, which are crucial to the financial independence of CHAI and CSCI, will the Minister say in what ways the financial independence of those bodies will be secured? We see nothing in the Bill to give us comfort on this. The noble Baroness, Lady Howarth, referred earlier to the damaging impact when cuts in resources can be imposed on bodies suddenly and almost without notice. That is potentially a very real issue.
	I turn now to one further amendment in the grouping, Amendment No. 318. This is a probing amendment designed to explore how fees will be set, and in particular seeks to ensure that English NHS bodies bear none of the costs attributable to any functions of CHAI in relation to Welsh bodies. Cross subsidy is rarely attractive but it is particularly unattractive if it means that there are hidden reallocations of resources between the two countries. I beg to move.

Baroness Barker: I rise briefly to speak to Amendment No. 321. It is a small amendment, but none the less relevant. It seeks to give CHAI the power to charge for its reports. Noble Lords who have worked long and hard in this field will know that such reports are always fairly bulky and expensive to produce; a considerable cost can be incurred. It seems only reasonable that CHAI should have the power to make a charge.

Lord Warner: I shall speak first to the non-government amendments in this grouping. As the noble Baroness, Lady Noakes, has explained, Amendments Nos. 232 and 253 seek to allow CHAI and CSCI to borrow money from the private sector. I assume that underpinning this proposal is the argument that such a power would reduce the dependence of CHAI and CSCI on government funding, thereby guaranteeing the commissions greater freedom of action. However, I should remind the Committee that allowing CHAI and CSCI to borrow from the private sector would go against Cabinet Office and Treasury rules for borrowing by non-departmental public bodies as well as precedent. Neither the Audit Commission nor Ofsted may borrow from the private sector, and no one suggests that those bodies are not independent.
	I hope that the amendments will be rejected, and to that end I shall set out further arguments. First, any money obtained through loans from the private sector is likely to be charged at higher rates than money borrowed from government. Thus there exists a very strong "value for money" justification for not allowing CHAI or CSCI to borrow from sources outside of government.
	Secondly, public bodies such as CHAI and CSCI will be providing a valuable public service and therefore cannot be allowed to run the risk of amassing excessive debts through private sector borrowing. Indeed, I felt a little queasy when the noble Baroness mentioned some of the things that the bodies might do. Such borrowing could present a real danger to the effective performance of their key functions. Equally, to allow bodies that are neither democratically elected nor responsible to shareholders to borrow from the private sector would be irresponsible, given that it would not be possible to hold them to account for their actions. Through allowing them to borrow only from government, as the Bill currently provides and in accordance with normal precedent for bodies of this kind, the risk of excessive debt is effectively nullified.
	The Government are committed to the commissions having access to the resources necessary for them to carry out their important functions. We are introducing new clauses which place duties on both commissions to manage their respective financial affairs so that their expenditure is covered by their income.
	The amendment is neither necessary nor desirable, for several reasons. Both commissions are already placed under a duty to carry out their functions effectively, efficiently and economically under paragraph 2 of Schedules 6 and 7 respectively. Furthermore, both commissions must ensure that they manage their budgets effectively under paragraph 10(3) of these schedules. In doing so, they must send annual accounts to the Comptroller and Auditor General, who in turn must certify them and lay copies of his reports before Parliament.
	Under Clauses 61, 62 and 84, the Secretary of State or the Assembly, as appropriate, may prescribe those functions for which CHAI and CSCI may charge fees. It may not be appropriate to allow them to charge fees for all their functions. For example, where they undertake a comparative study of a number of bodies in order to enable them to draw general conclusions as to the state of the health service or social services, it will probably not be appropriate to charge the bodies involved. We anticipate that it will be necessary for the bodies to retain an element of state funding for such studies.
	Amendments Nos. 319, 320 and 358 seek to ensure that any such regulations made by the Secretary of State and also, in the case of CHAI, the Assembly, do not hamper either commission's ability to manage cost recovery to the extent that they would fail to meet their financial duties as set out under the proposed amendments.
	Amendment No. 318 seeks to ensure that CHAI and CSCI do not charge fees which exceed the cost of the activity they are undertaking. While I am sympathetic to the amendment, I do not believe that it is necessary as, clearly, this is something that we would expect CHAI and CSCI to do as a matter of course. It has always been our expectation that any fees levied should be to cover operating costs rather than with a view to making a profit. It is not in CHAI's interest to overcharge healthcare providers.
	Currently Clause 61(6) provides a power that will enable the Secretary of State to make regulations that would allow an independent person or panel to review an individual charge that CHAI has set. Where such a person or panel feels that CHAI has wrongly applied its own fee scales in a particular case and, as a result, has charged too much for a particular review or investigation, they will be able to substitute a lesser fee. Clearly the independent person or panel will be very unlikely to substitute a lower fee if the amount charged by CHAI or CSCI was not sufficient to meet its costs. So the amendments are not necessary.
	Were CHAI or CSCI to set outlandish or unreasonable fee levels, it would be incumbent on the Government, like others, to make known their view that the fees set were not reasonable. If the bodies refused to set fees appropriately, the Government would have to take a view as to whether or not the chair of CHAI or CSCI was fit to carry out the duties of his office. Ultimately—this is something of a nuclear option—such behaviour could lead to the removal of the chair from office, although it would be very strange if such behaviour developed among incumbents of those offices.
	The position is different for providers regulated under the Care Standards Act. At subsections (2) to (5) of the proposed new Section 113A in Clause 103(2), the Secretary of State has retained powers to set fees under Part 2 of the Act, if necessary.
	Amendment No. 321 would entitle any person who requests a copy of any material relevant to a review or investigation under Clauses 45 to 47, or a study under Clause 53, to have one on payment of such reasonable fee, if any, that CHAI considers appropriate. I should draw the Committee's attention to the fact that CHAI is not given review or investigation functions under Clauses 45 to 47 of the Bill.
	The noble Baroness, Lady Noakes, drew attention to the issue of local authority and CSCI fees. The SSI is currently funded by a top slice of the local authority social services settlement. This money will be returned to local authorities when CSCI commences charging local authorities. We do not anticipate significant increased costs to local authorities.
	I now turn to the government amendments. Amendment No. 317A, 319A and 357A are technical amendments, recommended by parliamentary counsel, to Clauses 61 and 62, which allow CHAI to charge fees to NHS bodies with respect to the exercise of its review functions in relation to services commissioned by those bodies from practitioners or providers. The Bill currently empowers CHAI to charge fees to individual practitioners or providers with respect to the exercise of CHAI's functions in relation to the services provided by those persons and could be interpreted as not allowing CHAI to charge the commissioning NHS bodies with respect to the exercise of those functions. These amendments therefore enable CHAI to charge the commissioning NHS or Welsh NHS bodies with respect to the exercise of such functions by CHAI. We believe that there may be circumstances where CHAI may wish to charge the practitioner or provider—for example, where CHAI has investigated some problem with the practitioner's or provider's practice—and we retain that option in the respective clauses.
	Under Clause 84, fees are most appropriately charged to the local authority as the work that CSCI will be undertaking is in respect of all social services provided by a local authority, including those commissioned from other providers. However, parliamentary counsel has advised that, as in the case of Clause 61, there could be doubt as to whether Clause 84 allows CSCI to charge fees to the local authority with respect to the exercise of its functions in relation to services commissioned by the local authority from other persons.
	Amendment No. 357A therefore clarifies that when CSCI is carrying out a review of the social services provision of a local authority it may be able to charge that authority for work that it undertakes in respect of services that a local authority can commission or provide by arrangements with other bodies and not just for the services provided by the authority itself.

Baroness Noakes: I thank the Minister for that comprehensive reply. I shall have to wait until I read it in Hansard to absorb it fully. For example, I am not clear whether or not he answered my question in respect of basic financial duties. That may be because of my lack of comprehension rather than the lack of an answer, but time will sort it out.
	I thank the Minister for the clarification in regard to the charging of local authorities. The Local Government Association will be very interested in that. I shall ensure that it is made aware of it because one of its considerable concerns is that local government will end up bearing additional costs through this route. I suspect that that is what it will involve.
	The issue of financial independence was at the heart of the amendments, and the Minister did not give an answer on that. He answered that the Government wanted various powers to control CHAI and CSCI, and that that is the way in which the Bill has been drafted. It is directly contrary to the direction of travel in the amendments.
	The Minister referred to borrowing being against Treasury rules because excessive debts could be run up. But one minute we are told that we can trust CHAI and CSCI because they are responsible bodies, with excellent chairs and members, and that all the Government need are reserve powers—to get rid of a recalcitrant chairman, for example—and the next minute the Minister argues that they have to have the most detailed powers to prevent those bodies stepping an inch out of line. His answer did not carry any real credibility.
	The Minister often refers to the Audit Commission and Ofsted. The Audit Commission is quite different. It has extensive fee-raising powers, which is what drives its income and expenditure account. It is not constrained in the same way as CHAI and CSCI will be.
	There are a lot of loose ends in this area. Financial independence is a key element of the independence we seek to establish for CHAI and CSCI. I shall read carefully the Minister's comprehensive response—for which I thank him—and in the mean time I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Warner: moved Amendment No. 232A:
	Page 133, line 25, leave out "provided" and insert "proved"
	On Question, amendment agreed to.
	Schedule 6, as amended, agreed to.
	Clause 41 [The Commission for Social Care Inspection]:
	[Amendments Nos. 233 to 236 not moved.]
	Clause 41 agreed to.
	Schedule 7 [CSCI: Supplementary]:
	[Amendments Nos. 237 to 253 not moved.]

Lord Warner: moved Amendment No. 253A:
	Page 136, line 21, leave out "provided" and insert "proved"
	On Question, amendment agreed to.
	Schedule 7, as amended, agreed to.
	Clause 42 agreed to.
	Schedule 8 [CHAI and CSCI: transfers of property and staff, etc]:

Lord Warner: moved Amendments Nos. 253B and 253C:
	Page 136, line 32, after "to" insert "the CHAI or"
	Page 137, line 2, at end insert—
	"( ) A scheme under this paragraph may contain provision for the payment of compensation by the Secretary of State to any person or body (other than one mentioned in sub-paragraph (1)) whose interests are adversely affected by the scheme."
	On Question, amendments agreed to.
	Schedule 8, as amended, agreed to.
	Clause 43 agreed to.
	Clause 44 [Quality in health care]:

Baroness Barker: moved Amendment No. 253D:
	Page 16, line 16, at end insert—
	"( ) It is the duty of each NHS body to put and keep in place arrangements for the purpose of monitoring the uptake of the following NICE approved technologies—
	(a) pharmaceutical technologies, and
	(b) medical devices."

Baroness Barker: Clause 44 is, perhaps, the heart of the Bill in that it deals with quality of healthcare. It is a rather short clause, and my amendments would make up for the deficit in the description of what constitutes quality of healthcare.
	Members of the Committee who have read the debates on the subject in another place will have picked up on the widespread concern that what passes for quality in healthcare is often measured in terms of management performance. That is particularly of concern under the framework of foundation hospitals.
	The amendments would do two things. They would ensure that NICE guidance will be adhered to and that the task of monitoring it will be assumed by CHAI. Given the statement made by the noble Lord, Lord Warner, at Second Reading, in response to the noble Baroness, Lady Finlay, I am sure that he will be delighted to see that. The amendments also make it explicit in the Bill that national service frameworks, milestones and guidance are also to be the subject of scrutiny by CHAI and CSCI.
	The difficulty is that, having taken what is regarded on all sides as a huge leap forward in bringing together the best evidence, best research and best practice in national service frameworks, the Government have fallen short of ensuring that, in some cases, their implementation is backed by resources and in gathering and monitoring the data which come from that implementation.
	The amendments seek to make sure that the single most important source of information that will enable judgments to be made about quality in healthcare is a primary function of the new body. It is extremely important that information on the uptake of new technologies, new drug therapies and new clinical practices are gathered together, made available and fed back into the future planning of healthcare. For all that the independence of foundation trusts is to be welcomed, there is a genuine fear that there will be a dissipation of the gathering of data that will inform the development of future quality healthcare and, in particular, the innovation and effectiveness of new treatments.
	It is perhaps a truism, but in some disciplines of healthcare novelty in itself is often taken to be a quality standard. If one were to go back to look at the provision of some treatments—statins, for example—perhaps novelty in itself is not a quality standard. Some very old treatments which have been around for a very long time are far more effective.
	The coherence which these amendments would bring to the gathering of quality data by CHAI and CSCI is to be welcomed. I believe that there is a case for making this responsibility explicit on the face of the Bill. I beg to move.

Earl Howe: I am in complete sympathy with what the noble Baroness has said. I should like to speak to Amendment No. 274 in my name, which aims at very much the same goals as those of the noble Baroness.
	There is considerable concern, as I am sure the Minister is aware, about the patchy implementation of NICE guidance around the country. NICE guidance is meant to be binding on PCTs and trusts, but there is considerable evidence to show that it is being quietly ignored where budgetary constraints get in the way. The review being conducted by Professor Trevor Sheldon will no doubt prove illuminating. But meanwhile, there is a strong case for ensuring that a systematic and transparent process is put in place to ensure that NICE-approved medicines and technologies are accessible to all who need them. CHAI is the body most obviously suited to this task.
	Only last week we saw reported in the press the research by Glasgow Royal Infirmary showing that NICE guidance on statin prescribing is being widely ignored. Another example is atypical antipsychotic drugs; the Zito Trust has highlighted considerable variations in prescribing around the country. In some areas, atypical antipsychotics account for 70 per cent of all antipsychotics prescribed; in others, only 20 per cent. This is a concern in many areas. I understand the normal rule is for PCTs to implement guidance within three months. That is certainly not happening in many instances.
	I have consciously mentioned medical technologies as distinct from medicines. Medical technologies, such as pacemakers, stents and implantable defibrillators are implanted into patients in specialist centres, and not all are subject to national registries or have audit databases associated with them. As a result, unlike prescription drugs, reliable data on the uptake of medical devices are not available, and it is unclear whether government and NICE targets are actually being met. There is anecdotal evidence that they are not, particularly in relation to some cardiac and orthopaedic treatments. The first step towards enabling CHAI to monitor effectively the uptake of technologies and to highlight regional disparities would be for appropriate data to be collected at PCT and NHS trust level. I very much hope that this will happen.
	Hazel Blears, the former health Minister, was quite clear on the matter when she spoke in another place on 10th April. She said that it was the Government's view,
	"that the Commission for Health Audit and Inspection should be the principle external inspector of the implementation of NICE guidance . . . I expect that CHAI's work will cover clinical guidelines, as well as the appraisals that are integral to the clinical governance agenda in the organisation".—[Official Report, Commons, 10/4/03; col. 147WH.]
	Noble Lords will note that I specifically mentioned in my amendment not only health technologies but the clinical management of specific conditions.
	Hazel Blears' words seem unequivocal, but the Bill at the moment contains only an implicit duty for CHAI to monitor the update of NICE guidance. The duty ought to be statutory and the implementation of NICE guidance ought to be incorporated into CHAI's annual report to Parliament.

Lord Roberts of Conwy: I support my noble friend's amendment and the thrust of the amendment moved by the noble Baroness, Lady Barker. I have received a very good brief from the Medical Technology Group, which points out that medical technology is transforming healthcare by achieving a higher return on resources allocated for improved patient health and health system outcomes. The group gives a variety of examples, saying that diagnostic imaging virtually eliminates exploratory surgery; lasers allow more rapid recovery from eye surgery and other procedures; minimally invasive surgery avoids lengthy hospital stays and long recuperation; and so on. I have no doubt that the group is correct in its assessment.
	The group points out that medical technology not only benefits the patients but creates greater efficiency and savings in the health system, greater productivity, faster recovery times, a quicker return to work and lower absenteeism. Advances in technology have made exciting, groundbreaking possibilities a reality, and there are many examples of that.
	The use of medical technology and the resulting cost savings to the NHS and improved patient outcomes will enable the Government to achieve many targets as set out in the national service frameworks and Department of Health guidelines. It will also enable NHS bodies to fulfil requirements laid down in technology appraisals published by NICE, and ensure that the statutory requirement that funding follow all NICE decisions is met.

Earl Russell: As an academic, I am used to the problems that arise when a government attempt to assess quality. I am very happy to support my noble friend's amendment, which I believe to be necessary.
	I spoke recently with someone who had been in hospital for purposes of gender reassignment, who was very far from convinced that she was getting equal treatment to some of the other patients in the hospital. I remember on another occasion listening to a junior Minister, whom I will not name because, although he did not say so, I take him to have been speaking under Chatham House rules, who was very far from convinced that in the field of mental health patients received equal treatment.
	There are big questions here that need addressing. The only trouble with tabling any amendment to any Bill is that it necessarily has to be cast in terms comprehensible to the Bill. That, I am afraid, one cannot get round; but it may be that it is the terms comprehensible to the Bill that we need to consider. All the Government's thinking on quality within the profession rests on two premises. One is that government are capable of recognising quality when they see it. The other is that quality is ultimately quantifiable. It is about time that the Government started wondering whether the two assumptions need double checking.
	I remember reading a letter in the Independent from someone who had recently had a heart operation, from which, when he went in, his chances of recovery were approximately 50/50. He was being operated on by Sir Magdi Yacoub, who came to see him the night before, ran through a standard series of medical checks that he had to do, then spent half an hour sitting with him talking about Bach. The patient ascribed his survival to that half hour's conversation about Bach. We shall never know whether it is true or not, but I found it plausible. How do we quantify that in any form of performance indicator? Is that what distinguishes a great doctor merely from a very good one? If so, how an earth is the state ever going to recognise it?

Lord Warner: Although I applaud the sentiments behind the amendments and very much welcome many of the contributions made by noble Lords, I hope that I shall be able to provide sufficient reassurances to support our view that the amendments are unnecessary.
	We believe that the significance of NICE and the national service frameworks will be adequately reflected by the provisions already in the Bill. I shall briefly refer to the remits and purpose of those two pieces of activity. NICE's formal remit is the promotion of clinical excellence and the effective use of available resources in the health service, as the Secretary of State may direct. It is therefore central to our plans to modernise the NHS and drive up standards. I should like to give an illustration of the amount of effort being put in. There are currently 48 guidelines and 41 technology proposals in simultaneous preparation, making it the largest programme in any country. It is respected throughout the NHS and, indeed, throughout the international community. The national service frameworks are another element of the overall programme of modernisation.
	There is a set of arguments that I want to deploy from those two pieces of activity, which are designed to help us to improve health and social well-being by providing services to more people more quickly and to a higher standard; improving the patient experience, reducing variations in care across the country; and increasing compliance with evidence-based practice. The processes for doing that are enshrined in the Bill. The Explanatory Notes make it clear that it is envisaged that any statement of standards issued and published by the Secretary of State under Clause 45 of this Bill is likely to be informed by national service frameworks, NICE guidance and other relevant sources.
	Having established NICE and national service frameworks, it would be bizarre if the Secretary of State ignored all that work and those activities in setting the national standards that he will have to set and which will be made public later this year. As the Minister responsible for overseeing the work on national standards, I can assure Members of the Committee that the experience of NICE, national service frameworks and others will be reflected in those national standards. We are building up national standards that reflect those particular pieces of work and experience.
	Clause 45, which relates to national standards published by the Secretary of State, makes it clear that any NHS body and cross-border strategic health authority is under a duty to take such standards into account in discharging its duty of quality under Clause 44. There are some strong mechanisms for building the work of NICE and the national service frameworks into the national standards.
	The Bill then requires CHAI to produce criteria which the Secretary of State will ultimately approve which are compatible with measuring performance against those national standards. In our view those arrangements are strongly enshrined in this piece of legislation.
	As I said, CHAI must take account of those standards when it undertakes its reviews. I remind the Committee that NHS bodies are also under an obligation to provide funding for treatments and drugs recommended by NICE within three months of guidance being issued. Of course, we know that there are some problems in some parts of the country with meeting that obligation but the obligation is clear and statutory. CHAI will therefore take account of statutory obligations on NHS bodies when carrying out its reviews. I suggest that we have a well-established set of arrangements which enshrine NICE and national service framework work in the standards that will be set under this legislation. The criteria that CHAI establishes will be consistent with those national standards. The work of NHS bodies will be inspected and reviewed by CHAI using those criteria. It will become apparent in the work done by CHAI where particular bodies are not operating in a way which is consistent with national service frameworks and with NICE guidance.

Baroness Barker: I thank all Members of the Committee who took part in this extremely useful debate. I note particularly the comments of my noble friend Lord Russell who, as ever, takes us into the heart of a point very memorably.
	The Minister's response was encouraging but not sufficiently encouraging to dissuade me from returning to the matter at a later stage. Great Explanatory Notes of History is not a tome that I have read. The explanatory note that the Minister read out does not carry sufficient force to satisfy me or, I imagine, the noble Earl, Lord Howe. I believe that we agree that there is much good work going on, particularly in national service frameworks. The difficulty is that they do not have the force of statute and their implementation is therefore a matter of some randomness. That is the heart of the issue. The Minister's response did not go far enough to satisfy us that in future all that good work will be implemented. The question remains why the Government are running away from their own good work. I thank the Minister for his reply. I shall withdraw the amendment for the moment but I signal that this is a matter to which I am sure we shall return. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Barker: moved Amendment No. 254:
	Page 16, line 20, at end insert "; and
	(c) services to support independent living and rehabilitation"

Baroness Barker: I turn to two other matters which again relate to quality in healthcare. The lack of definition of "quality" has concerned a great many organisations in different fields. The double whammy of a lack of definition of "quality" and the lack of clarity about the extent to which foundation trusts will pursue objectives which mesh with the rest of the healthcare system prompt these two probing amendments—Amendments Nos. 254 and 255.
	Amendment No. 254 relates to rehabilitation and independent living. The amendment was no doubt drawn up in the wake of our discussions on delayed discharge. There is great fear that foundation hospitals, as bodies concerned principally with acute care which are at some remove from the rest of the healthcare system, will not place the emphasis that they should on the key factors in the lives of the largest number of their users—older people and other vulnerable adults.
	Amendment No. 255 refers to the need to consult with patient representatives and clinical experts and tries to determine what quality standards are. In speaking to a previous group of amendments, I said that there was a great deal of emphasis on managerial matters such as response times and numbers of staff. However, there is much less emphasis on what could truly be described as qualitative matters, for example, cleanliness in hospitals. I was reminded of that in our discussions on patients forums. Patients and users had been aware of problems arising from lack of cleanliness in hospitals long before they reached Ministers' desks. The amendment seeks to include those people who have a slightly different perspective on the matter in the drawing up of the definition of "quality". It is important that we seek to widen definitions and to get away from number crunching as a way of determining whether foundation trusts will work and whether healthcare is of a sufficient quality. I beg to move.

Baroness Finlay of Llandaff: I strongly support the spirit of the amendment. Healthcare is not just about trying to prevent disease occurring, diagnosing it early and then treating it. The treatment is often devastating for the patient. Rehabilitation is absolutely essential if they are to resume their lives after treatment. Only this week we have had statistics about the number of patients in chronic unmanaged pain. An amputation might signal the end of treatment for a gangrenous leg, but the path to rehabilitation and eventual independent living is long and tortuous. It requires resources and such patients require support. With good support and good rehabilitation processes outcomes are dramatically different. With such support many of these patients will return to work and feel that they have resumed the role in society from which they were plucked by their illness. Without a continuum of rehabilitation services and the ongoing provision of quality care, many patients will become chronically disabled and depressed and will be unable to contribute to society as a result of their illness. I beg the Minister to include the provision as a quality measure. The bulk of healthcare falls within the list specified in the amendment.

Earl Russell: I am very glad that the noble Baroness, Lady Finlay of Llandaff, said what she did about pain. It is a constant drag on a great many people. Apart from the sheer unpleasantness it is also a constant interference with their ability to work. The incapacity benefit test, as it stands at present, because it measures a person's medical condition in a snapshot taken at one moment simply does not take adequate account of things—it never has done. If the noble Baroness were able to assist in promoting a dialogue between the medical authorities and the Department for Work and Pensions she might make a contribution which would be very valuable to a great many people.
	I agree also with what my noble friend Lady Barker said about involving users, by which I take it she meant not only patients but also those who at a more junior level are engaged in applying treatment. She brought back to me a memory of a train journey across Yugoslavia in 1961 in the days when Yugoslavia was still able to pretend to be a country. I was sitting next to a surgeon from Zagreb who was describing the operation of a works council that, because it involved nurses as fully-fledged members, had succeeded in convincing the authorities that it was not sensible to polish the floors until they were so shiny that every nurse fell over when going about her duties. That is a lesson that needs relearning from time to time.

Lord Warner: Amendment No. 254 would add consideration of,
	"services to support independent living and rehabilitation",
	to the definition of healthcare that, subject to parliamentary approval, Clause 44 will establish as,
	"the promotion and protection of public health",
	and,
	"services . . . for or in connection with the prevention, diagnosis or treatment of illness".
	No one would disagree with many comments made by Members of the Committee about the importance of independent living and rehabilitation being properly linked as part of the patient pathway from ill health to recovery. However, I on the whole suggest that it is not the business of the National Health Service to provide services to support independent living and rehabilitation. That has been seen increasingly as the job of local authority social services, which under the Bill are subject to inspection and monitoring by CSCI. Where such services are provided by the NHS, they would in any event be within the existing definition of healthcare as services provided in connection with the treatment of illness.
	I respectfully suggest that there is not a great deal of merit in the proposed change, which would simply confuse the position further on what is social care and what is healthcare. Many Members of the Committee know only too well that those issues have been difficult to define for many people at an operational level. Over the past two decades or so, we have moved a long way down the track of seeing the services as best provided within the world of social care. Many professionals would see the amendment as a slightly retrograde step—as something that goes back on some changes brought about in the past two decades. I am happy to place myself in this camp, based on my experience as a director of social services.
	With respect to the duty of equality, Amendment No. 255 seeks to ensure that NHS bodies consult persons such as patient representatives, clinical experts and CHAI to ensure the effective discharge of their obligations to monitor and improve the quality of healthcare that they provide or obtain. Given our increasing emphasis on patient and public involvement, I sympathise with the amendment, but the local clinical governance and other arrangements already in place remain sufficient.
	When implemented effectively, clinical governance ensures high-quality patient-focused care. That is why it is and will remain for NHS bodies, as part of their accountability arrangements, to provide evidence that they have appropriate mechanisms in place. Their clinical governance arrangements are, of course, looked at as part of performance monitoring. A key part of the work of CHAI will be to continue to investigate the performance of individual bodies. To ensure that each and every NHS body meets the needs of the population that they serve, each already consults with additional persons such as patient groups as a matter of course.
	Although the amendments are well intentioned, I do not think that either is necessary. I suggest as gently as I can that Amendment No. 254 slightly goes back rather than looks to the future.

Baroness Byford: My contribution will be very small. I am somewhat concerned, having heard the noble Lord's response. I am not quite sure whether he is saying that this is not the right place in the Bill—that is one matter—or that the problem is covered by something else, which is a totally different matter. Rehabilitation is hugely important. As someone who has had two heart attacks, the rehabilitation that I received from one hospital was of very different quality from that of the other.
	I shall raise a smaller problem. When I was involved in the WRVS—it was a long time ago—one of the big problems was with those released from hospital and into the responsibility of social services. It was a huge difficulty, and I do not think that it has been solved properly even now, 20 years later.
	I add my questioning voice. It is not a Front-Bench voice but my personal interpretation. I came in rather late. Have I misinterpreted a suggestion that the provision would be in the wrong place? However, if it is a good idea and in the right place, I hope that the Minister will dwell on it a little further and that the noble Baroness will take him up on the issue, as it is enormously important.
	On another personal account, my brother lost two fingers in an accident. Although his treatment at the hospital was good, it has taken some time to get to grips—that is a bad expression, but it is very true—and cope in a way that he had perhaps never thought of before. I am sure that there must be lots of similar cases. My experience of the two Leicester-based hospitals was that one was very much more highly geared to give specific after-care that was enormously beneficial, and meant that I returned to work very quickly compared with the first time round when it was not the same standard.

Lord Warner: I was not saying that the provision was in the wrong part of the Bill, but that the overwhelming majority of rehabilitation and moving towards independent living was seen as part of the world of social care rather than healthcare. That is not to say that none of it is important in relation to healthcare. Where it is part of healthcare, those issues can be inspected by CHI already. The lead area of relevant inspection should remain with CSCI, which is what we have tried to maintain in the Bill. We are not in any way diminishing the importance of the service areas to which the noble Baroness draws attention.

Baroness Finlay of Llandaff: Will the Minister clarify something for me on rehabilitation, as I am feeling a little confused? Highly specialised physiotherapy and occupational therapy, limb-fitting services and other very technical services are currently called rehabilitation services. All the people working in those services would seek reassurance that they were not suddenly being excluded from healthcare and transferred across. They view themselves very much as core members of the management team within healthcare, which I think is precisely why the noble Baroness tabled the amendment.

Lord Warner: All of us who have worked in health and social care want the individual patient experience to be seamless as they move from one to the other, as many people do. It is inevitable that, at some point, the NHS ceases to take responsibility and that the social care agency takes it. The precise time when that happens varies slightly from one part of the country to another, and is slightly different for different individuals.
	The amendment and this part of the Bill are not about the merits or demerits of rehabilitation or independent living, but about the inspection and review arrangements for those services. There are two inspectorates, CHAI and CSCI. All that we say—it is a much narrower point than some of the debate—is that primary responsibility on inspection in this area is likely to be with CSCI, because the great bulk of the work on rehabilitation and independent living takes place in social care. We are not saying that there is no rehabilitation and no independent-living work in the health services. The primary inspection responsibility should not be confused, because it is likely to rest in CSCI. All that we are arguing is that the amendment could confuse the responsibilities of the inspectorates.

Baroness Noakes: Is the Minister saying that rehabilitation services within NHS bodies, such as those referred to by my noble friend Lady Byford and the noble Baroness, Lady Finlay, would be inspected by CSCI rather than CHAI? That was not my understanding.

Lord Warner: When the noble Baroness reads Hansard, she will see that I said that under the definition of "health care", one could include rehabilitation and work towards independent living, but I said that the bulk of that work was undertaken in a social care world. We have already discussed whether there would be protocols between CHAI and CSCI or joint working. There may well be reviews in which both inspections are involved. Noble Lords are attributing to my words—though I am pleased that they are listening to them—much more importance than is required. I have said merely that rehabilitation and independent living are primarily social care areas which are likely to be the responsibility of CSCI, but I have not said that they will be the responsibility only of CSCI. Healthcare includes those elements and, where it does, CHAI will have an involvement.

Baroness Noakes: In that case, where in subsection (2) of Clause 44 would one fit rehabilitation?

Lord Warner: "Treatment".

Earl Russell: As the Minister has now returned to the point twice, I shall touch on a point that I was going to refrain from making. He has slightly misunderstood the grammar of my noble friend's Amendment No. 254. I do not think that it was the purpose of that amendment to suggest that the NHS should be in charge of independent living. The word which governs that amendment is "promotion"—promotion of health and of independent living. In neither respect does the amendment suggest that the NHS should be in charge of all health. As I understand them, the words of the amendment are teleological. They describe a purpose to which "health care" should be addressed, not a continuing condition for which the NHS should be responsible. That makes a number of the Minister's criticisms a little wide of the point.

Lord Warner: In order for us to move on, I shall take away the amendment and have a look at its wording. I would be surprised if we were to shift our position, but I am happy to review the matter in light of possible confusion about our position. Before Report, I shall write to all noble Lords about the issue.

Baroness Barker: I thank all noble Lords who took part in that discussion. It perfectly encapsulated some of the worst things that are happening in hospital discharge. The debate perfectly encapsulated the gap between discharge from acute hospitals and community care.
	I imagine the Minister is relieved that he did not sit through the many hours of the Community Care (Delayed Discharges) Bill when we discussed those matters at considerable length. It was feared then, as it is now, that continuing healthcare in the community had been inappropriately considered. My fear, and it has perhaps grown in the past half-hour, is that the inspection regime has not been fully thought out or joined up.
	I thank all noble Lords. I will await with eager anticipation the noble Lord's letter to me, but I hope that he is not defensive of his position and takes on board the intent behind the amendment, which was precisely to see joined-up services in rehabilitation. On that note, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 255 not moved.]
	Clause 44 agreed to.

Earl Howe: moved Amendment No. 256:
	After Clause 44, insert the following new clause—
	"STANDARDS
	(1) The CHAI shall be the principal guardian of standards in the NHS and shall prepare and publish standards in relation to the provision of health care by and for English NHS bodies, Welsh NHS bodies and cross-border SHAs.
	(2) The CHAI must keep the standards under review and shall publish amended statements whenever it considers it appropriate.
	(3) The CHAI must consult the Secretary of State, the Assembly and such other persons as it considers appropriate before publishing a statement or amended statement under this section.
	(4) The standards set out in statements under this section are to be taken into account by every English NHS body, every Welsh NHS body and every cross-border SHA in discharging its duty under section 44."

Earl Howe: In moving Amendment No. 256, I shall speak also to Amendments Nos. 336, 344 and 345. Amendment No. 256 precedes Clause 45 for a very good reason. It both anticipates and diametrically opposes the provisions of the clause. That provides us with a classic illustration, if ever there were one, of why the amendment tabled by my noble friend Lady Cumberlege at the start of the Committee proceedings was so apposite.
	Clause 45 is a mark of the Government's obsession with political control of the health service and it is profoundly misconceived. It states that the standards to which healthcare is provided in the NHS are for the Secretary of State to determine. The principle underlying my amendment is simple. It is to state that the standards which are promulgated in the NHS and the equivalent standards adopted in social care should be those for which CHAI and CSCI respectively can claim full responsibility as independent bodies.
	I have used the words "principal guardian" in the amendments and I hope that these convey the right connotation of ownership that is predominant but not exclusive. It is to be hoped that when standards are set in the NHS everyone will feel ownership of them, but CHAI will be their chief defender and promoter. The Government say that CHAI is there to assess whether the standards set by the Government have been reached and that it would be quite wrong for the body responsible for setting standards to be promoting them. This amounts to saying that CHAI cannot be judge and jury in its own cause.
	I believe that that is exactly what CHAI ought to be. The standards by which the quality of healthcare is to be measured should not be for politicians to determine. As the noble Earl, Lord Russell, pointed out last week in a characteristically acute intervention—and I am sorry he is not in his place now—benchmarks that are set for the NHS by politicians contain hidden clinical judgments.
	The present Government came to office in 1997 proclaiming a healthcare standard: it was that fewer people should be kept waiting for treatment. To the voter, that standard seemed sensible. But arising from it, targets were set which meant that the NHS, instead of being in the business of treating the sickest patients first, was all of a sudden in a numbers game. The standard and the targets worked directly contrary to the interests of patients because they distorted clinical judgments.
	The Government have now moved away from a pure numbers game by focusing on waiting times, but they are in exactly the same trap. While it can matter very much how long a patient has to wait for in-patient treatment, what really matters is that the sickest and most urgent cases are treated before less serious ones. These are prime examples of how political interference in setting standards can damage patients—and I could name others.
	To me, this issue is the crux of Part 2 of the Bill. The Secretary of State can try to influence CHAI insidiously through the purse strings that he holds and the appointments that he makes. Each of these is wrong. But if CHAI is not to be fully responsible for the standards that it upholds and cannot defend those standards to the hilt as clinically and ethically well-founded, its credibility will be non-existent.
	Nor is there any sense in proposing, as the Bill effectively does, that the standards of quality that are observed in England should be different from those that are observed in Wales. It is a nonsense to think of a different and parallel set of standards operating in Wales, yet Clause 46 explicitly provides for different standards to be in force in Wales, set by the Assembly.
	We all know about devolution—like it or dislike it—but to say that there should not be a uniform set of standards recognised on both sides of the Border is carrying devolution to excess. We will have an opportunity to debate Clause 46 a little later.
	What I passionately want to see emerging from the Bill are two organisations—CHAI and CSCI—which command the confidence of patients, of hospitals, of PCTs, local government, care homes and the general public. They should bestride the NHS and social care and they should bestride politicians.
	If need be, CHAI should be in a position to say to the government of the day and to the Assembly that this or that is what should happen for the good of NHS patients and these are the standards that we should use for measuring the delivery of the service. The second-guessing of standards by Ministers is, in my view, no way to proceed.
	Therefore, I make no apology for the amendments. They go to the heart of the difference of approach between the Government and ourselves towards professional autonomy in the health service and beyond. The Government should be letting go of the reins. I beg to move.

Baroness Barker: I shall speak to Amendments Nos. 259, 261, 262, 263, 265 and 267, which are grouped with those of the noble Earl, Lord Howe. These amendments follow very much in the same vein as those outlined by the noble Earl. In order to have the confidence of the public, the process of setting standards should involve the key stakeholders—particularly patients.
	I return to the matter of national service frameworks. One reason that the national service frameworks are so good and effective is that they are the product of collaboration between researchers and clinicians and, in particular, they involve patients in the process. One of the greatest things about national service frameworks is that they counteract the often episodic view of illness which can come across from a strictly clinical point of view.
	We believe that, taken together with the approach of the noble Earl, Lord Howe, the amendments that we have tabled provide the way to achieve a set of standards in which confidence can be sustained. Therefore, it is my pleasure to support the noble Earl, Lord Howe.

Lord Warner: I shall backtrack a little. The report from the Office of Public Services Reform, published earlier this year, sets out government policy on the respective roles and responsibilities of those involved in the inspection of public services. It clearly sets out the role of Ministers and their departments as being,
	"to set standards determining how the service is to be delivered and to make sure effective performance management systems are in place".
	That is our general proposition on setting standards and on their relationship with measuring performance. I shall elaborate on that a little.
	It remains our view that it is wrong for the bodies responsible for inspecting services and for ensuring that they comply with certain standards to also be responsible for setting those standards. Furthermore, it is also entirely wrong for government to abrogate their responsibility for setting the standards of care for NHS patients and for those in receipt of social services to independent commissions. That would be the effect of the amendments.
	I suggest that it is for the government of the day to determine the framework within which the NHS and social services should operate and to set the budget commensurately. Setting the standards for health and social care provision enables the Secretary of State to match performance expectations with funding. It would be entirely inappropriate—some would say even irresponsible—to divorce the function of setting standards for the performance of public services from the function of determining the level of funding that those services should receive.
	I was very interested in the noble Earl's view that one can let an inspection body set standards, irrespective of the cost of funding those standards in the public arena. I suggest that that would be an interesting approach to budget-setting for any future Chancellor of an alternative government to the present one.
	The publication of standards by government is also a vital tool for ensuring the democratic accountability of health and social services. Were governments to be prevented from setting standards for health and social care, it is difficult to see how they could be held accountable for the performance of those same services. I want to remind noble Lords what my noble friend Lord Hunt said at Second Reading. He said that we cannot,
	"completely divorce the NHS from politics. Politicians do have to make judgments about national standards. They do have to make judgments about resources".—[Official Report, 8/9/03; col. 68.]
	I suggest that those same principles apply to social services in a global sense.
	Healthcare standards set by the Secretary of State are the core tool for ensuring increased levels of quality in the health service. Setting healthcare standards, implemented at a local level and assessed by an independent body, is the means by which the Government can ensure that the greatly increased resources being provided for the health service—around 7.5 per cent in real terms per year—are appropriately directed and spent wisely.
	The power of defining the standards of health and social care will be inclusive. We are not saying that they will be written by people simply sitting in Richmond House. Our draft standards for healthcare, on which we are working, will be subject to a three-month public consultation later this year and that will take full account of the views of all stakeholders, including CHAI.
	For English local authority social services, there is a long and well-tested route for setting standards under Section 7 of the Local Authority Social Services Act 1970. Standards issued under that provision are well known and respected by local authorities and are used in the assessment of performance by the Social Services Inspectorate. That process has been in existence for a very long time. Indeed, in an earlier incarnation I was subject to that inspection regime against national standards. CSCI will continue the practice and will be able to take an overview of the quality of all social care services using standards issued under that section and national minimum standards issued under the Care Standards Act.
	In addition, in Clause 53 we provide particular provisions for CHAI to advise the Secretary of State of changes it thinks should be made to the standards that he issues for healthcare. Using existing provisions of the Care Standards Act and Clause 75 of this Bill, CSCI will also be able to advise on standards for social care issued by the Secretary of State. Therefore, when the inspectorates find things which suggest that modifications of national standards should be applied, we are not saying that there is anything to stop both inspectorates communicating their views on that to the Secretary of State and, indeed, where necessary, putting those views into the public arena.
	Standards are not static: they change over time. They can change to respond to public expectations, growing expenditure and concerns about health. We suggest that amending them in those circumstances is the job of elected governments, not inspectorates.
	Unlike other amendments in this group, Amendment No. 263 would leave the Secretary of State to set standards but would require him to undertake a process of public consultation before publishing them. As I have said, the Secretary of State will not burden the health service with health care standards which do not have wide support. I have indicated that we shall have a full range of consultation on any national standards provided by the Secretary of State under Clause 44.
	I shall not make a long speech about Wales. Essentially, the short answer to the points raised is that we devolved responsibility for health care to the Welsh Assembly. It is for the Welsh Assembly, alongside the Secretary of State for Health in England, to set the standards for Wales in accordance with their needs and under the terms of the devolution settlement for Wales. Many of the same arguments that I set out for England apply in the Welsh context except that it is the responsibility of the Welsh Assembly rather than that of the Secretary of State for Health.

Earl Howe: I did not expect to persuade the Minister in my remarks. The situation is quite simple. We do not agree that Ministers should set standards. There is a fundamental disagreement running through the heart of this debate. From our point of view this is all about taking politics out of the health service. That is a consistent theme of the Opposition throughout the Bill.
	I have no difficulty with the Secretary of State feeding budgetary stipulations into the formulation of standards. Indeed, my amendment allows for that. However, I deeply believe that the health service should be assessed against objective standards of quality—as objective as they can be—and standards which everyone can see are evidence-based and which do not have unintended consequences. All of the standards set by the Government in the past few years—waiting lists, waiting times, A&E waits, two-week cancer waits or whatever they happen to be—are well-intentioned. However, they are all wrongly formulated because they have unintended adverse consequences. If in a major part of its work CHAI is just the poodle of government Ministers, we are merely perpetuating central control of the NHS by indirect means. Sooner or later—probably sooner—that would work to the detriment of patients. Standards of quality in the NHS are not to be defined as whatever the Secretary of State thinks patients want. That is the nub of this issue.
	We cannot get any further here. I note what the Minister said. I do not agree with it. I think that this is a theme we shall pursue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Byford: moved Amendment No. 257:
	After Clause 44, insert the following new clause—
	"LOCAL POLLS ON FLUORIDATION
	(1) A Strategic Health Authority may conduct a poll to ascertain the views of those polled about—
	(a) any recommendation to fluoridate local water supplies; or
	(b) any recommendation to cease fluoridation of local water supplies.
	(2) It shall be for the Strategic Health Authority concerned to decide—
	(a) who is to be polled, and
	(b) how the poll is to be conducted."

Baroness Byford: Many noble Lords are aware that when we took the Water Bill through this House earlier this year, one of the provisions which was added late in the day involved adding fluoride to the water system. As I am sure the Minister is aware, this issue is hugely controversial.
	When the Bill was originally presented to us that particular section was not in it. We debated through Committee and still it was not added. It was not until we were coming towards Report stage that we insisted that we should have a separate Committee stage to debate this important issue. Whether one is for or against the idea, it is controversial as, indeed, we proved in the House.
	The reason for bringing this matter before the Committee tonight is that when we debated it at that time in the Water Bill we were told that the responsibility for the decisions to be made would be taken away from the water companies and local authorities and given to the Strategic Health Authority. As this Bill is now before the Committee it seemed foolish not to seek clarification of how the Government intend to proceed.
	The Water Bill is currently before Members in another place. They too will find this whole question of adding fluoride to the water a very controversial issue and perhaps be more split than your Lordships. To be fair, I believe that the majority of noble Lords feel that it is wrong to deny the addition of fluoride to the water if it will save children's teeth. That is the big argument. Others will take the opposite view and say that it would be better to supply free toothpaste and toothbrushes to all families who could then go about their business in the normal way. Some people say that we are creating a nanny state and that people should organise their health in a better way. So that was the debate when we discussed the issue earlier.
	I tabled the amendment to try to discover from the noble Lord, Lord Warner, whether the Government have given any further thought to the subject since it was raised in the summer. The matter is quite complicated. My understanding, unless the situation has changed since the summer, is that one strategic health authority might take one view and the neighbouring authority another, but that they are both supplied by water from the same water company. Whether the Government have solved that practical problem since our discussions earlier this year, or whether it has just been left quietly in the background, I cannot possibly judge. Certainly, it is a very great issue in the country.
	As I say, I do not call for families to be denied opportunities. The purpose of the amendment is to seek guidance. We were told in our debates that the Government would go to public consultation. They were not able to tell us how that consultation would take place. They were only able to tell us that it would not be one person one vote. No more information was given about how these strategic health authorities would achieve their aim.
	I apologise for raising an issue which is perhaps a little wide of many of the Committee's discussions, but it is a timely opportunity for me to raise it in this important Bill. It may be that we shall not have another important health Bill in which this issue can be addressed. I beg to move.

Earl Howe: My noble friend has made a very well-reasoned case. I hope the Minister will respond constructively. I would only add to what she has said by making a couple of brief points. If polls are held, those who vote should obviously be well informed. I would hope that any poll would be preceded by proper public consultation on what are, after all, complex issues. Polls on their own are clearly not enough.
	I am relaxed about the idea of strategic health authorities instigating polls. Whether they are the right body to conduct polls is another question. I am a little doubtful about that because it is unlikely that strategic health authorities would be regarded as neutral in this debate. But that is a detail.
	I am sure my noble friend would agree—and she has acknowledged as much—that ideally her amendment would sit better in the Water Bill rather than in this one. Nevertheless, I take no exception at all to her initiative in raising the matter under this banner. I look forward very much to hearing what the Minister has to say.

Baroness Andrews: Barely four sitting weeks ago, we did indeed have a very lively debate on this issue. I thought that it was rather good fun. One matter we agreed on eventually was our wish to give local communities a real choice on whether to have their water supplies fluoridated. We had some considerable discussion on that.
	The Water Bill, which is still in the Committee stage in another place, addresses the full range of issues which must be addressed to remedy the flaws in the existing legislation on fluoridation. The noble Baroness will know that those provisions cover the rights and duties of the water companies, the publication of proposals and the consultations required, as well as the assessment of public opinion. The Bill includes enabling powers to make regulations on consultation and the assessment of public opinion.
	Perhaps I may just reiterate the stage we have reached, which is simply to restate that strategic health authorities will have to ascertain public opinion on fluoridation schemes. The final decision on schemes will rest with the strategic health authorities. I am sure that the noble Baroness will remember, in our debate in this Chamber, my noble friend Lord Warner speaking at great length—perhaps even exhaustive length—about the range of options which the SHAs could undertake in order to ascertain public opinion. He spoke of everything from local TV and radio to public opinion surveys involving the professional bodies and achieving, as an objective, a means of measuring public opinion from the widest range of backgrounds as possible.
	We also spent some time discussing the nature of the regulations. I would say to the noble Baroness that these will be affirmative regulations. They will return to this House and there will be another opportunity to discuss their nature and content. I again restate what my noble friend said: this will not be done in a "hole in the corner manner". Indeed they will require the SHAs not least to seek the views of the local population.
	The point is that even before we get those affirmative regulations in this House, they will have to be consulted upon. I feel sure that when they return, the process will meet the issues about which the noble Baroness is concerned—the necessity of making sure that the consultation is valid and is robust; that it takes into account the wider fringes of opinion; and that the eventual decision is that which meets the wishes of the local community.
	I hope that with those reassurances she will accept that we are trying to go the extra mile to make that a proper process. I look forward to her contributing again on the affirmative regulations. I hope that the noble Baroness will find it possible to withdraw her amendment at this point.

Baroness Byford: I thank the Minister for her considered response. When I say that I am not happy, I mean it genuinely. I feel that we have moved no further since the summer. She is right to say that we had a long debate and that the noble Lord, Lord Warner, kindly listed all the various options but, at the end of the day, a small word remains in my mind: how? I am no further forward on that. I think that the noble Baroness has again said that nothing has been decided; that various options are open to us; and that we shall try to end up by reflecting what the local community wants, although we have still not discovered how to do that.
	The noble Baroness—and the noble Lord, Lord Warner, during our previous discussion—said that regulations would be laid under the affirmative procedure. That is a start, but we cannot change regulations—unless the noble Baroness tells me that we can; my understanding is that we cannot. So the only chance that we have to clarify what will happen is when a Bill is in front of us. During debate on the Water Bill I was told that that was impossible and that I was out of order: it would be the responsibility of the health authority, which is why I am back here pursuing it.
	I thank the noble Baroness for her genuineness. I am not happy, but I must wait to see what happens to the Water Bill at the other end of the Corridor, because I know that many honourable Members on all sides of the House are extremely exercised by the problem. I went to the Public Bill Office because I was not sure whether I was technically correct to raise the matter tonight, so I apologise to the Committee, but I am technically correct to do so. I hope that doing so will push the Government a little further towards giving us greater guidance on how they envisage the regulation being advanced—if possible, before the Motion that the Bill do now pass. At this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 258 not moved.]
	Clause 45 [Standards set by Secretary of State]:
	[Amendment No. 259 not moved.]

Earl Howe: moved Amendment No. 260:
	Page 16, line 24, leave out "may" and insert "must"

Earl Howe: On behalf of my noble friend Lord Peyton, and at his specific request, I move Amendment No. 260, standing in his name and speak also to his Amendment No. 264 as well as my amendment, Amendment No. 260B. Were he here, my noble friend would speak much more trenchantly than can I on the matter to which he draws the Committee's attention. It relates to the concern that he has so often, rightly, raised about the role of the Secretary of State and what the Secretary of State ought to be doing. The clauses give wide powers to the Secretary of State running parallel with the wide powers of CHAI.
	Were he here, my noble friend would reiterate his concerns about double banking and second guessing of CHAI by the Secretary of State—and vice versa. I am sure that my noble friend will want to return to the matter on Report, depending on the answer that the Minister is kind enough to give.
	CHAI's remit has a number of broad headings—for example, the effectiveness of NHS management, the delivery of patient care, and so on. If standards must be set by the Secretary of State—it seems that the Minister is not to be persuaded otherwise—they should be set only in respect of those broad headings.
	If that happens, some, but not all, of the objections that I raised on the previous group of amendments will fall away. If that occurred, CHAI would set the criteria for the standards and monitor performance accordingly. But we should not countenance a multitude of standards set by the Secretary of State, some of them perhaps overlapping with the standards and criteria set by CHAI. That would place CHAI in a very difficult position. The broad domains of CHAI's work are a legitimate focus of interest for the Secretary of State, but those domains are few in number; hence the amendment that I have tabled. I beg to move.

Baroness Barker: I shall speak to Amendment No. 266, which is in this group. Following our recent discussion on an earlier group of amendments, Members of the Committee will not be surprised to learn that we feel that, if the Secretary of State is to set the standards, he or she must be required to consult patient representatives, clinical experts and CHAI. The amendment is yet another attempt to ensure that the standards to which healthcare must be provided, and that CHAI must inspect, are clinical targets not political measures. It is as simple as that. I make no apologise for expressing our view in those terms.

Lord Warner: I was interested to see the amendment tabled by the noble Lord, Lord Peyton, suggesting that the Secretary of State must publish national standards. It suggests that he is a strong supporter of the Government's position as outlined in the previous discussion. I do not wish to go over all the ground again. I wish to remind Members of the Committee of the context of our approach. The Government undertook, in their response to Sir Ian Kennedy's Bristol report, to ensure the development of standards for the NHS. We think that that is a function of the Secretary of State.
	When the Government announced the establishment of CHAI, they stated that there would be inspection against clear national standards and a continuation of the vision for CHI set out in Learning from Bristol. We have already held nine workshops, attended by more than 200 key stakeholders drawn from patients, clinicians, representatives of professional and voluntary organisations, NHS managers and many others. The advice from those individuals is helping us already in the development of national standards. We are reaching out to people on the frontline with responsibilities for delivering healthcare in the framing of those national standards. We will publish a draft statement of standards later this year for a wide-ranging public consultation process. We will undertake appropriate consultation when any future amendments are made to the standards. We are absolutely committed to a full range of consultation.
	The standards will cover all aspects of services, including safety and efficacy, the involvement of patients, their families and carers, accessibility and responsiveness, environment and amenities—such as food and cleanliness standards—and governance, both clinical and corporate. They will come into effect in April 2004. I must disappoint the noble Earl by saying that, from the work that we have done already, the arbitrary figure of 10 that he proposed would be impracticable and would help neither the inspectorate nor the National Health Service. That is the approach that we are adopting.
	We do not think that it is necessary to name the specific groups that would be consulted, as the amendment in the name of the noble Baroness, Lady Barker, proposes, which specifies,
	"patient representatives, clinical experts and the CHAI".
	Worthy though they are, the amendment would give them a statutory status denied to a wide range of other groups that will be involved in the process, such as voluntary and charitable organisations, non-clinical specialists, trade unions, management organisations, international experts, NICE—which we discussed earlier—the National Patient Agency and the Health Protection Agency. I could go on. A wide range of people is involved in the process of devising national standards. Well-intentioned though the amendment is, it is too narrow. The process of setting healthcare standards will be an inclusive one and we do not believe that the amendments are necessary.

Earl Howe: I am grateful to the Minister, but I am dismayed to hear that the department intends to promulgate an inordinate number of standards for CHAI to implement. I can only return to the concerns that I raised in a debate on a previous group of amendments. The provision is inordinately prescriptive. I am not sure how welcome the Government's approach will be to CHAI either, although that must be a matter for Sir Ian Kennedy to judge. Clearly, my amendment was a probing one. It has probed very successfully and we will have to reflect long and hard on the implications of what the Minister has told us. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 260A to 267 not moved.]
	Clause 45 agreed to.
	Clause 46 [Standards set by Assembly]:

Earl Howe: moved Amendment No. 268:
	Page 17, line 6, after "such" and insert "NHS bodies in areas of England adjoining Wales and cross-border SHAs and such other"

Earl Howe: Even if the Government are unable to agree with the arguments that I tried to put forward earlier, I would strongly urge them to consider this amendment. It suggests that, before publishing a statement of standards, it should not be enough for the Assembly to consult such persons as it considers appropriate. It should be obliged, at the very least, to consult those hospitals and SHAs in border areas of England that may be affected by the standards that the Assembly sets in Wales.
	English hospitals will be performance managed by English strategic health authorities according to standards laid down in England. If those hospitals accept Welsh patients, everyone must be clear about the standards to which doctors, nurses and managers should be working with regard to the care of those patients. If it is proposed for example, that Welsh NSFs, not English NSFs should apply to Welsh patients, not only do the English hospitals and their doctors have to sign up to that difference, the strategic health authority must also take it into account for performance management purposes. To take a hypothetical example, if beta interferon were the treatment of choice under Welsh standards of MS treatment but not English ones, that would have direct budgetary and clinical consequences for English hospitals and their staff.
	Alternatively, the Assembly may accept that Welsh patients who are hospitalised in England should be subject to English standards of treatment. In that event, equally, consultation would be necessary with those English health bodies potentially affected.
	Ideally, the standards laid down on both sides of the border would not differ from one another, but if that is to be made to happen—as opposed to being a fond hope—there is no possible argument for the Assembly failing to consult relevant health service bodies in England. Either way, with the greatest respect for our Welsh friends and colleagues, it makes no sense for Wales to treat itself as an island in drawing up its standards of treatment. It must bring into its deliberations all those across the border whom its decisions will affect. I beg to move.

Baroness Finlay of Llandaff: I have listened carefully to the debates about standards, and I have many questions for the Minister about the relationship between devolved healthcare in Wales and the situation in England. I seek some assurances.
	My understanding was that, if the Secretary of State set standards in England, the National Assembly for Wales would have to pick up through CHAI only the standards that it thought were important for the population of Wales, particularly if there were thematic issues, such as apply to cancer care, or major cross-boundary flows, such as in cardiac surgery. That would allow the Assembly to benchmark services in Wales against services in England, and it would be able to establish local standards in Wales that would be monitored by the healthcare inspection unit in Wales, which will benchmark standards throughout Wales. The reason was that inspections by CHAI in Wales would not be as frequent as those by the healthcare inspection unit, whose role would be to run an ongoing monitoring process to drive up standards.
	I seek clarification that the clause will ensure that that process will happen, that, as part of that process, cross-border issues will be covered and that, with thematic flows, there will be equity of standards for patients travelling across the border.

Baroness Andrews: Some of the issues raised by the noble Baroness, Lady Finlay of Llandaff, come up in a later amendment. I may decide to answer them in the context of the later amendment. I may also decide that it would be better to answer her specific questions in writing to ensure that there is clarity of understanding on the issues.
	The noble Earl's amendment would place an obligation on the Assembly to consult English NHS bodies operating in areas that adjoined the Welsh border before publishing a statement of standards. I hope that I can convince the noble Earl that such an amendment is unnecessary.
	The noble Earl said that everyone needed to clear about what will be inspected and against what standards and why. We have not had the clause stand part debate on Clause 46, so I simply refer to what my noble friend said about how important it was that Wales developed its own standards. He made the dual case that it was a devolution issue, as a matter of principle, and, secondly, that it was a practical issue because Wales was different. It would take me too long, even with the assistance of the noble Baroness, Lady Finlay of Llandaff, to explain why Wales is so different, but the Committee must take it from me that it is.
	One of the things to be seen particularly in Wales is a different pattern of epidemiology. There is different social and medical geography, and there are different concentrations. Obviously, clinical standards do not vary, but the new Welsh health authorities are trying to deal with issues in a different way. Within what we might think of as a suite of standards—not simply a set a standards—clinical standards will be the same, but organisational principles will be different. For example, in Wales, one of the organisational targets that we might set is to have more work done through the medium of Welsh. We might also, for example, see a higher priority being given to primary care because of the relative quality of primary care. Therefore, there will be differences in the priorities that are set. When we are talking about Welsh standards, that may be the type of priority we are considering.
	As regards the amendment, I want it to be clear that, under the Bill, the Assembly does not and will not set standards that apply to healthcare provided by English bodies for English patients: nor should it. Ultimately, it will be for the commissioning body—whether it be Welsh or English—to take responsibility for the provision of care to patients from its areas.
	The Assembly's responsibilities for setting standards quite properly extend only to the NHS in Wales and to those English bodies which provide healthcare for Welsh patients under the commissioning arrangements already in place. Those commissioning arrangements have been in place for many years and they work. There has rarely been much contention attached to them.
	In cases where English bodies provide healthcare to Welsh patients, they will be acting, in effect, as sub-contractors, as they always have done. As with any other contract, Welsh commissioning bodies would expect to be able to set the contract conditions, which, in this case, would be the standard to which healthcare is to be provided. In the same way, Welsh bodies contracting with English commissioning bodies to provide services to English patients in Wales would expect those services to match the standards set by the Secretary of State and CHAI to ensure that the terms of the contract have been complied with. Since those boundaries will be in place, there would be no reason for cross-border consultation because I am certain that it will be clear.
	I stress, as I have before, that clinical standards do not and should not vary across the NHS in England and Wales. In setting standards in Wales which reflect the particular needs of Wales, as I have tried to illustrate, the Assembly will do that in the light of cross-border England and Wales bodies, such as the National Institute for Clinical Excellence and the Royal Colleges. With those reassurances, I hope that the noble Earl will withdraw the amendment.

Earl Howe: I realise that the noble Baroness has tried to be helpful. Patients in Wales and England do not expect two sets of standards that are roughly the same. They expect the same sets of standards, which, I believe, are quite a different matter from prioritising healthcare needs. The Welsh Assembly is entitled to prioritise the way in which funds are used to treat patients in Wales. I have no quarrel with that. The standards by which those services are delivered should not differ from those that operate in other parts of the country.
	We might debate Clause 46 stand part to wrap up these issues. I sense that a number of Members of the Committee would welcome a return to this issue, albeit it a brief one. I do not propose to say any more on the amendment. I am disappointed that the noble Baroness seems to think that there is no need for a consultation requirement for the Assembly. I still believe that there is. I shall read carefully what she said and I will reflect on the matter between now and Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	On Question, Whether Clause 46 shall stand part of the Bill?

Earl Howe: I approach Clause 46 from the point of view of the patient. A patient would regard it as a total nonsense if, as soon as the Bill comes into force, a process of standard setting takes place across the Welsh border that is entirely separate from the process taking place in England. Why cannot there be co-operation and co-ordination leading to a single set of standards and a single inspectorate? Why cannot CHAI and CSCI be guardians of a uniform set of standards in both countries and monitor those standards independent of government?
	The noble Lord, Lord Warner, remarked earlier that health is a devolved matter. Yes, he is right to say that, but it cannot be an entirely devolved matter or else Clause 46 and all the Welsh provisions would have no part in this Bill. Westminster still has primary legislative responsibility for health matters in Wales. On that basis, I can only repeat that I believe it is totally unnecessary to have different standards operating on each side of the border.
	I believe that different national service frameworks apply in Wales for diabetes, heart disease and children's services. There can be no sense in that. This is not to criticise the competence of the Assembly or what is set out in those national service frameworks; it is simply to say that standard setting by the Assembly is needlessly confusing and a duplication of effort. As I said earlier, the Assembly has the right to determine priorities for healthcare in Wales, but that is quite different from saying that the standards by which care is delivered have to be different from those in force in England. Everyone should agree what are the standards and one body should be tasked with monitoring them.
	If one pursues this, different standards presuppose different treatments. If that is so, one must ask: to what purpose? Heart disease is still heart disease wherever it occurs. Diabetes is still diabetes. Yet it is perfectly possible to imagine the treatment of choice for a particular condition being different depending on which side of the border a patient is being looked after and which national service framework is in force. That cannot be a sensible result of devolution; it has to be just plain crackers.
	The issue will come into starkest focus in hospitals located near the border, as we have just debated. In hospitals such as the Countess of Chester Hospital in Chester, doctors may find that they have to administer one type of treatment to an English patient and another type to a Welsh patient suffering from exactly the same condition. How is the performance of those doctors then to be assessed? Either we will have duplicated inspections of those hospitals by CHAI and then again by Welsh inspectors, which would be crazy—I hope that that will not happen—or we will have CHAI tasked with inspecting the treatment of Welsh patients as well as English, but doing so, in the case of the Welsh patients, against benchmarks to which it does not subscribe. That again would be crazy. All we are doing here is tying ourselves up in knots.
	It is not enough merely to hope that the standards on either side of the border will marry up with each other, as the Government appear to be doing. What the Bill proposes is manifestly not in the interests of patients.

Baroness Barker: My noble friend Lord Clement-Jones has also put his name to the Question whether Clause 46 should stand part of the Bill. The noble Earl, Lord Howe, said that he approaches this matter from the standpoint of the patient. I think perhaps that he approaches it from the standpoint of the English patient. As I listened to his words, I became less convinced of his arguments, although I agree that the clause is worth debating, as is the preceding clause.
	Noble Lords on these Benches have the same concerns about standards being set by the Assembly, but only on the basis that we have expressed concerns about standards being set by the Secretary of State. I believe that it is entirely possible to approach this from the standpoint that there may be healthcare needs in Wales which are different from those in England and which may then lead to the development of different standards.
	For example, there is a high prevalence of pneumoconiosis in certain areas of Wales. Therefore, while it is entirely reasonable to accept that common standards can be set for some conditions, to which people living on both sides of the border may subscribe, how those standards are implemented may well differ on a national basis. We are concerned whether Clause 46 does in fact give the Assembly the freedom it needs to achieve standards in a different fashion.

Earl Howe: Will the noble Baroness allow me to intervene? I think that she is confusing standards with the criteria of treatment. Standards should be standards, wherever they are set. If someone suffers from pneumoconiosis in England, they should be treated to the same standard as if they suffered from the condition in Wales. The criteria may well differ on either side of the border.

Baroness Barker: I would cite the example of Northern Ireland, where they are attempting to achieve the same standards of healthcare but are going about it in a completely different way with money that they have been awarded by the Government. If they can achieve the same standards in a different way, that is a legitimate thing to do. But there may be conditions in Wales which require different standards—which is also a legitimate concern—and that is one of the freedoms that we would wish to see before the Assembly.

Baroness Howarth of Breckland: I differ with the noble Baroness, Lady Barker, and agree with the noble Earl, Lord Howe. Standards are standards and implementation criteria are the way in which you achieve those standards.
	I intervene briefly to raise an issue which, I fear, I have raised slightly tangentially before. It is a matter about which I am still uneasy. I refer to the issue of specialist care. I again cite the example I know best of children who suffer from single ventricle conditions. An organisation called Little Hearts Matter is working to ensure that children in Wales, Scotland, Northern Ireland and England receive the same standards of care.
	I am referring to very specialist care. If a child does not receive the exact care he or she will simply die. I know about that condition but I am sure that there are examples in the treatment of cancer where patients need a particular specialist care and for the same standards to apply wherever they are. Can the Minister reassure me about such standards?
	I met the family of a child who was ill in Wales. It took two hospitals to diagnose that the child was suffering from a single ventricle disorder before the child was transferred to a specialist hospital in England, where the correct treatment was received. A child in England went straight to that hospital. Luckily, both survived—but the chances of the second child were far higher than the chances of the first.
	Diagnosis standards and standards of treatment need to be the same, although the way in which we reach those standards may be different. I want to be absolutely sure that the treatment of specialist conditions will have standards clearly set wherever it may be in the United Kingdom.

Baroness Finlay of Llandaff: As someone who is practising in Wales I have been involved in these discussions from both sides. I hope that what I say may add a little clarification because I believe that there is not as big a difference between everyone as there would appear to be at the moment.
	As I understand it, the Assembly has no problem at all with the thematic standards for specialist services and children being treated equitably. Unfortunately, if a diagnostic delay occurs in one hospital, or a diagnostic delay occurs in a hospital in England, it could be due to 100 different reasons that may have nothing to do with the standards specifically set.
	There are standards and, yes, there are absolute standards—and those standards should be reached everywhere. But there are additional issues in relation to the delivery of standards in Wales. It is very important that we involve local clinicians in the generation and the wording of the standards in order to take them along with the improvements to be instigated. We need to ensure that they have ownership of the standards as they apply to Wales, and that they are not perceived as standards written by the Secretary of State in England and catapulted into Wales. That certainly would not be accepted by the professionals who have to enact the standards. Minimum standards have to be emblazoned on their consciousness at all times to ensure that they are met.
	The consultation process and the necessity of taking the profession along with this requirement has meant that differences have emerged in regard to the need to deliver healthcare services to the population of Wales. My understanding is that the Assembly will be subject to, observe and respect the standards set by CHAI; that the inspectorate from CHAI will cover England and Wales; and that therefore specialist services will be benchmarked, Welsh patients against English patients in different regions in England. In addition, health inspection in Wales will take this local process of consultation and try to drive up standards of care in those areas which have a lot of work to do.
	It is with a fair degree of shame that I have to admit that in parts of Wales there is a lot of work to be done. We have very specific recruitment and retention issues in some parts of Wales. We have some problems that relate to the history of the health services in Wales. We also have problems that relate to the industrial history of the population of Wales, which have not applied in the same way, by and large, to the population in England. The percentages and the numbers affected are very different. It has been my understanding that there is no wish to lower the standards in Wales but there is a recognition of a gap that needs to be driven up, and the professionals have to go with it.
	I do not think people are that far apart. The Assembly is only too aware of the need to drive up the minimum standards, which it has been attempting to do.

Baroness Andrews: I am extremely grateful to the noble Baroness, Lady Finlay, for that explanation, which she delivered with the authority of her profession working in Wales. She is absolutely right, and I hope she has reassured noble Lords that there will be no difference in the standards of clinical care provided, or between desired patient outcomes, in England or Wales. However, she has explained that there are differences in the ways of doing things and the way in which the bodies will work. She has drawn attention to the fact that there will be a health inspectorate in Wales which will be created under the Government of Wales Act 1998. It will do just as she says—drive up local standards across Wales in certain areas. At the same time, CHAI will be in operation in certain clinical areas, doing its cross-border work.
	Let me gently remind the Committee that, in Wales, health is a devolved matter. The National Assembly is responsible for the delivery of healthcare services in Wales. It should set its own healthcare standards; it should reflect the social and medical demography; it should involve its clinicians, voluntary bodies and patients in the way in which it knows will work best, because its history and geography are different. In exactly the same way as the Secretary of State would expect to set healthcare standards with all the conditions that my noble friend discussed, so does the National Assembly expect to set them in Wales.
	In would be unreasonable in the future for CHAI simply to impose its own standards across Wales as it will be developing them in England. I do not want to extend this debate, in view of the hour, and I hope that the noble Earl will not oppose the Question that the clause should stand part of the Bill.

Earl Howe: Perhaps I could wrap up this short debate by thanking all those who have taken part. It has been illuminating, and I am particularly grateful to both noble Baronesses who have spoken from the Cross Benches for teasing out some of the finer points of these issues.
	Yes, the Minister is quite right—health is a devolved matter to Wales. I am not seeking to turn the clock back. The Welsh Assembly is responsible for the delivery of healthcare in Wales and the prioritisation of services. If it chooses, it is entitled to set targets.
	I am in no way advocating the imposition of English standards on Welsh clinicians and Welsh patients. I would not dream of such a thing—it would be patronising in the extreme. However, I am in favour of a collaborative, nationwide approach to the setting of standards. That is a desirable aim for both English and Welsh patients and for those who administer the treatment. It is not heresy to propose that CHAI and clinicians on both sides of the border should agree to what standards the NHS should work. That leaves entirely open the question of implementation criteria and prioritisation and all the other things that I have mentioned.

Baroness Andrews: I remind the noble Earl that Clause 141 requires the Assembly and CHAI to co-operate with each other, so there is a beacon of hope in the Bill.

Earl Howe: I am grateful to the Minister for drawing the Committee's attention to that clause. Let us hope that it is carried aloft by those tasked with this tremendously important matter.

Clause 46 agreed to.
	Clause 47 [Introductory]:

Baroness Noakes: moved Amendment No. 269:
	Page 17, line 17, leave out subsection (1).

Baroness Noakes: On behalf of my noble friend Lord Peyton, and at his specific request, I move Amendment No. 269. I shall speak also to our amendment, Amendment No. 373, standing in my name and that of my noble friend Lord Howe. Like my noble friend Lord Howe, I cannot pretend to rise to the oratorical heights of my noble friend Lord Peyton in moving the amendment, but I hope that I do not let him down too badly. He will certainly let me know if I do.
	Amendment No. 269 proposes the deletion of Clause 47(1) and, with that, the so-called "general function" of CHAI to encourage,
	"improvement in the provision of health care by and for NHS bodies".
	CHAI has been set up, as its title informs us, to audit and inspect the NHS. It is really asking too much of such an organisation to have as its "general function"—by which I assume is meant an overriding or exceedingly important function—the improvement of healthcare. Like many organisations that involve audit and inspection, we will expect CHAI to produce from time to time illuminating insights into how healthcare is delivered. Those insights may indicate how healthcare could be improved. In time, that could lead to improvements in healthcare. But CHAI has no powers beyond its reporting powers, and I believe that we ask too much of CHAI to say that its important or general function is to encourage the improvement of healthcare. I am sure that it will not discourage the improvement of healthcare, but that is quite a different matter from having a key responsibility to improve it.
	Amendment No. 373 in this group adds elderly people to the children who are specified as a particular focus of CHAI in Clauses 47 and 101. If children are to be specified, the exclusion of other vulnerable groups from special mention leads the reader of the Bill to believe that they are less important. We seriously doubt the need positively to specify particular patient groups in either of the clauses.
	The inclusion of children, though worthy, seems likely to owe more to the issue of the moment, following the Victoria Climbie inquiry, than to rational analysis. Over time, different groups will be perceived as more or less worthy of special focus. That could be safely left to CHAI, but if the Government are determined to include one vulnerable group, we believe that, as a minimum, elderly people must also be included. Elderly people comprise a large group of people with many and varied special needs, and they can be at least as vulnerable as the young. I beg to move.

Baroness Barker: I shall speak to Amendment No. 270 and all those that follow in the group. To a large extent, I echo the comments of the noble Baroness, Lady Noakes. We believe that it is somewhat invidious to have named one particular group in the Bill. It is particularly strange to have done so, given that older people comprise the largest number of healthcare users.
	As regards the other amendments, we believe that a key function of CHAI will be to inspect the provision on the availability of information about healthcare. Time and again in surveys consumers of healthcare mention their concern about access to information on local healthcare services. Throughout the passage of this Bill noble Lords and Members of another place have spoken about the Office of Fair Trading report on dentistry and the great difficulties people have knowing where to get information about local dental services. Guides to local NHS services were supposed to be distributed to every household last October and yet surveys show that people do not recall having received them. Information about the availability of healthcare is of fundamental importance. Therefore, we believe that it should come within the functions of CHAI.
	In Amendment No. 275 I return to my favourite subject of ethical practice. We believe that it should be an explicit function of CHAI to have and to provide information about ethical practice within healthcare.
	However, I wish to concentrate on Amendment No. 277 which governs the extent to which it will be possible for CHAI to provide information, or to inspect the extent to which information is made available about the continuing healthcare responsibilities of the NHS.
	I hate to tackle the Minister as he did not have the joy of being the Minister during the passage of the delayed discharge Act but during that Act's passage we spent a very, very long time discussing this matter. We did so in the wake of the ombudsman's report which was highly critical of the Department of Health's guidance on information about the continuing healthcare duties of the Department of Health. Since that time all strategic health authorities are supposed to have instigated a review of the information made available by agencies, and particularly to analyse the extent to which it is compliant with the Coughlan judgment. There remains a great deal of uncertainty about the clarity of the information and, indeed, the clarity of the guidance which is available. We believe that that is a critical function for CHAI to inspect, involving, as it does, one of the biggest groups of users of services.
	The Minister will know that an immense amount of work is being done on the implementation of the No Secrets guidance regarding good practice in the protection of vulnerable adults. In the light of that we believe that it is wrong not to mention vulnerable adults, people with learning disabilities and people with mental health problems on the face of the Bill. The amendments seek to correct that.

Baroness Howarth of Breckland: I wish to address Clause 47(2)(d). I wish to retain that provision in the Bill. I have had a long career working with the whole range of vulnerable groups, including many who are invisible when in hospital. I have been involved with an organisation which seeks to promote the recruitment of specialist nurses to help disabled people entering hospital as their needs are not always recognised.
	I wish to have children firmly included on the face of the Bill because they are the most invisible group in a hospital setting. Children and young people become lost on general wards as there is still not a great deal of specialist provision for them. That does not mean that I do not believe that there are vast numbers of other people with rights. However, the fact that most of the users of hospital services are elderly people gives them a huge advantage in terms of the acknowledgement and attention that they receive whereas children become lost in such a setting.

Lord Warner: I shall quickly go through the amendments, most of which have slightly different purposes. Amendment No. 269 would have the perverse effect of removing CHAI's duty of encouraging improvement in the provision of healthcare by and for NHS bodies. Given that CHAI is being established to help drive out poor performance, improve further the quality of care and continue to raise the quality of healthcare standards, it could be argued that CHAI's duty to encourage improvement is clearly implicit. However, we believe that subsection (1) should remain as a clear signal to healthcare providers, patients and the public of CHAI's primary purpose.
	Amendment No. 277 would place a duty on CHAI to ensure that the NHS fully discharges its legal functions under the 1977 Act to provide continuing healthcare. The noble Baroness may have overlooked the fact that a duty of care was introduced by the Health Act 1999. A consequence of that duty is that NHS bodies are already under an obligation to put and keep in place arrangements to monitor and improve the quality of healthcare that they provide to all individuals. Thereby, statutory force is given to the introduction of clinical governance within the NHS. I understand the noble Baroness's concerns, but we do not think that Amendment No. 277 is necessary either.
	Amendments Nos. 270 and 276 suggest in effect that CHAI should pay particular concern to the availability and quality of information for patients about healthcare. I am pretty sympathetic to those amendments, certainly more so than to some of the others, as I shall make clear. In reviewing the quality of healthcare, CHAI has the power to review the quality of information provided. We fully expect that to be the case.
	I accept that there is something special about information in many respects, and I understand the arguments that the noble Baroness has consistently made about the importance of providing information to patients so that they can exercise choice and decisions. I am willing to take those two amendments away and consider the issues and the intention behind them further. We shall see whether we can do something to help in the run-up to Report.
	Amendments Nos. 271, 272, 278, 373 and 374 would place CHAI under a duty to have particular regard to the need to safeguard and promote the rights and welfare of older people and other vulnerable patient groups, as Members of the Committee have said. I do not in any way question the importance of the issues that the amendment raises. I obviously have sympathy with those concerned about the vulnerability of older people and certain other adults. However, I feel that we have to draw a line somewhere in listing those patient and service-user groups to which CHAI should pay particular attention. If we were to list each individual group in the Bill, that would begin to undermine the principle that CHAI should have regard to safeguarding and promoting the rights of all patients and service users, including the groups mentioned.
	It is also very difficult to define precisely what we mean by vulnerable adults. Some adults may be vulnerable in some contexts but not others. The existing definitions of vulnerable adults in the Care Standards Act 2000 and regulations in the Police Act 1997 are intended to include people who may be vulnerable because of a situation in which they are placed. For example, one area of the definition relates to,
	"an adult to whom personal care is provided in their own home under arrangements made by a domiciliary care agency".
	That definition may cover many people with disabilities who do not want to be classified as vulnerable in other areas of their lives. We think that there is quite a problem with definition.
	I am grateful for the support given by the noble Baroness, Lady Howarth, on the issue of separating children out as a special case. I would not have expected otherwise, given our joint backgrounds in the area. We have chosen to continue to ensure that the most vulnerable group in society—children, as identified in the Care Standards Act—is covered very specifically. Again, I have to emphasise that singling children out for such attention does not mean that other vulnerable groups will not have their rights and welfare well within the sights of CHAI.
	I draw attention to the fact that CHAI has already made clear its intention to do that in its Vision statement in June of this year. That outlines its commitment to promote equal citizenship by ensuring that the well-being and healthcare of vulnerable groups are fully reflected in its assessments and that their rights are safeguarded. Those groups include older people; people with mental illness or learning disabilities; people from areas of social deprivation; or people for whom English is not a first language. In light of the reassurances that I have given, I hope that noble Lords are willing to think again about that issue.
	Amendment No. 275 places a duty on CHAI to consider varying degrees of the application of "correct ethical practice". That is a matter for the General Medical Council. I am certain that if the Government had proposed such an amendment, it would have been deemed interference in medical self-regulation, which has a long tradition.
	We realise that the system is not perfect and that bad individual cases come to light. However, if CHAI becomes aware of, or suspects, something amiss in the way in which healthcare professionals are behaving, it will be open to it to report that to the appropriate body. Clause 135(2)(g) explicitly provides for CHAI to disclose information to another body for the purpose of its statutory function of safeguarding patients. Those bodies would include the likes of the GMC. It will then be for the appropriate body to investigate further. Therefore, we do not believe that the amendment is appropriate.

Baroness Barker: I thank the Minister for his reply on information, which is a neglected but important area of healthcare. Although he said that the fact that children are included in the Bill should not be read as an exclusion of other groups, it has already been interpreted in that way. As an employee of an organisation that works for poor, older people, I have no wish to see children or any other client group put at odds with one another.
	If the Minister is to resist attempts to include definitions of groups, might he agree to reconsider our proposal at a previous sitting that the general duty of equality should rest not only with CHAI, but also with CSCI and NHS bodies? That may be a far neater and more elegant way of addressing our genuine fears about different levels of provision for the different groups named in the Bill.

Lord Warner: I am happy to look again at that issue, but I cannot make any promises. As someone who may be classified now as an older person, I certainly do not regard myself as vulnerable.

Baroness Noakes: I know that my noble friend Lord Peyton will read carefully in Hansard the Minister's reply to his Amendment No. 269. My noble friend has indicated to me that he is in earnest about his amendment. Without wishing to pre-empt my noble friend's views, I should warn the Minister that he will almost certainly want to return to the issue on Report.
	On the issue of elderly people, children and other vulnerable groups, I was disappointed by the Minister's attitude. The noble Baroness, Lady Howarth, stood up for children as I expected that she would. Children may get lost, but elderly people get very badly treated. They are still a very large and special group. I still have a problem with specifying children, while not specifying other groups who are equally important.
	It is not a question of whether or not the current CHI will take this matter into account. I have every confidence that the organisation emerging under Sir Ian Kennedy will be as conscientious as we hope it to be. The real issue is that of visibility over time. If something is not on the face of the Bill, there is an implication that the only important group is children, and I do not accept that. I want to reflect on the matter, and I am afraid that I have to put the Minister on notice that we may well want to return to it on Report. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 270 to 272 not moved.]

Earl Howe: moved Amendment No. 273:
	Page 17, line 28, at end insert "; and
	( ) the clinically appropriate prioritisation of healthcare interventions"

Earl Howe: Clause 47 is important because it defines what CHAI is being created to do and what its legal functions are to be. I have no difficulty with any of the functions listed in subsection (2). However, I do not believe that they cover the ground fully.
	My amendment suggests that CHAI should also be concerned with the clinically appropriate prioritisation of healthcare interventions. At first sight, that may seem unnecessary. We know, and I am sure we all accept, that doctors have a duty to prioritise treatment for their patients on the basis of clinical need. However, over the past few years, we have seen a distortion of that process, brought about by politically inspired target-setting. There is no doubt at all that these centrally imposed targets, especially those relating to waiting times, have affected the scheduling of elective and non-emergency treatments.
	It was instructive in July to hear Michael Barber, head of the Prime Minister's Delivery Unit, concede to the Select Committee on Public Administration in another place that poorly designed goals,
	"can lead people to put effort into the wrong thing".
	He also said that targets can work,
	"to the detriment of all other activities".
	That, I suspect, is as close as we are going to get to an apology from the top of government for inappropriate target-setting over the past few years. Yet some of the Government's key targets are still in place. As the BMA pointed out, a maximum waiting time for cancer diagnosis may well prompt excessive referrals. It is characteristic of many of these targets that they are about process rather than outcome.
	Centrally imposed targets will not of course be binding on foundation trusts. However, the risk that clinical priorities will be distorted in a foundation trust will still be there—albeit emanating from a rather different quarter. Should it happen that the board of governors contains a powerful and influential element which insists on certain resource allocations that advantage a particular group of patients at the expense of others who are in more urgent need, that should be a matter of concern.
	CHAI needs to be alive to the risk of such events and alive to when they happen because they directly affect the care of patients. The proper prioritisation of healthcare is quite distinct from the availability of it and quite distinct again from its quality or effectiveness. I suggest that if CHAI does not include clinical prioritisation as a formal part of its remit, it will not be doing its best by those who use the health service. I beg to move.

Lord Warner: We have some difficulty with the amendment. Reading it at face value, it would seem to require CHAI to look at whether doctors made the right decisions in their approach to, and treatment of, patients. That is, of course, a matter for the General Medical Council and other professional bodies. It rather looks as though the amendment sets up CHAI to second-guess clinical decision-making and, indeed—it could be interpreted as such—to second-guess NICE, which does much work in setting out whether certain interventions and drugs are the most appropriate way to treat particular conditions.
	We have some difficulty in trying to interpret the amendment. From what the noble Earl said, I was not sure that he had reassured me on those particular concerns. We do not think that there is any question of CHAI being unable to comment on either national standards or, indeed, the way things are working out in practice in the health service. The provisions in the Bill are framed so as to set up CHAI to carry out a proper monitoring role and report on what it sees happening in an independent way at the NHS front line.
	I suggest that any concerns the noble Earl has are covered within the framework we set up for CHAI. If the inspectorate thought that there was a distortion of suitable clinical priorities on a widespread basis—I do not believe that to be true—it would be possible for CHAI to say so. Areas such as national service frameworks and how they are working are well within the remit of CHAI. There is nothing to stop CHAI—indeed, that is its purpose—finding out how such things work in practice, reporting on them and telling the story as it sees it. Indeed, that is why it is being set up.
	I believe that the concerns of the noble Earl may be a little wide of the mark. Certainly, for the reasons I have sought to outline, we do not think that the amendment is appropriate.

Earl Howe: If it is the case that my amendment is unnecessary, as the Minister's latter remarks seem to suggest, I am pleased. However, I think he was being a touch disingenuous. I would not have expected him to acknowledge forthrightly that there are certain political targets that have been imposed on the NHS that have had a distorting effect on clinical prioritisation, but that is my firm belief.
	We are not talking of doctors underperforming but of managerial override of what doctors want to do. Managerial override is not an issue for the GMC. Most certainly, I would have thought, it is an issue for CHAI. I will read carefully what the Minister said. I hope that the Bill does contain scope for CHAI to highlight such events, should they occur. I have no regrets about raising the topic under this amendment. I shall again consider the matter. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 274 to 278A not moved.]
	Clause 47 agreed to.
	Clause 48 [National performance data]:

Baroness Barker: moved Amendment No. 279:
	Page 17, line 30, leave out "has the function of publishing" and insert "must publish"

Baroness Barker: I was heartened earlier on by the Minister's response to our amendments concerning the role of CHAI and information. Amendment No. 279 goes one step further and deals with CHAI's role in relation to data on clinical performance.
	The amendment seeks to remove the rather ambiguous and perhaps inelegant phrasing which exists in this clause; that is,
	"has the function of publishing",
	and states that CHAI must publish data. It is important to state that for two reasons. First, it must be the organisation's basic raison d'entre to do that; to gather such information and to make it publicly available. Secondly, it is important to make sure that this independent body—and I do not propose at this hour to rehearse earlier arguments today about its independence—is the authoritative body which will publish data about healthcare performance, even, I would suggest, when that is inconvenient to Ministers or embarrassing to the Government. I do not think that there can be a greater test of the independence of a public body. I am sure, given the Minister's earlier reassurances this afternoon about its independence, that that should be no problem.
	I am not being flippant. One of the many things taught us by the Bristol review was the difficulty of gaining data in the first place and the importance of that data being in the public domain. That has led to improvements in services and trust and public confidence. This is an absolutely essential part of the building of that trust. I therefore hope that the Minister will give a favourable response to the amendment. I beg to move.

Baroness Howarth of Breckland: I noticed earlier in the afternoon that the noble Lord, Lord Warner, spoke of putting the Government's views in the public arena. I hope that means directly to Parliament. I have two experiences. One is with the Food Standards Agency, which reports directly and is able to make its views known to the public. The other is with the National Care Standards Commission, which makes its views known to the Minister who decides whether the Government will make them known to the public. There is a real difference.

Lord Warner: Clause 48 gives CHAI the function of publishing data in relation to the national performance of healthcare provided by and for NHS bodies. It will be for CHAI to determine what this may entail and how it goes about it.
	It may help the Committee if I explain that where a public body is to be given some broad task, it is usual in legislation to confer a "function" on it, rather than to impose a duty, as this amendment proposes. The exception is where it is desired to oblige the body to do a specific task; for example, the duty in Clause 49 to publish an annual review.
	The Bill, therefore, gives CHAI a raft of functions including the function of publishing data relating to the provision of healthcare by and for NHS bodies under Clause 48. We would naturally expect CHAI to exercise all of its functions. However, we are trying to leave it to decide how to perform those functions. We have attempted not to be over-restrictive about what that should cover.
	I feel that the amendment would tie CHAI's hands, burdening it with a requirement to publish data on all performance rather than in areas which it, as a body, finds would be most beneficial. That would obviously require a great deal of resource, which would need to be diverted from other resources if we moved to this kind of obligation proposed in the amendment.
	I do not think that there is anything sinister in giving CHAI a degree of discretion about what it publishes. Some would say that that will enable it to target the material it puts in the public arena in a more effective way in order to highlight major concerns, rather than just becoming a machine, so to speak, to disgorge a large amount of data and performance information without producing the synthesis and analysis which shows those major areas of concern.

Baroness Barker: I thank the Minister for that reply, which I must say is somewhat disappointing. He overstates what we are attempting to do; we are not attempting to tie the hands of the regulator. The amendment does not state how the regulator should discharge that function, simply that it should do so. That seems to me in no way as prescriptive as the Minister made out.
	This is of fundamental importance. That body will be independent and with the information and resources that will for many people determine, not least, the exercise of their choice, which is one of the Government's stated fundamental aims in the Bill. There are other reasons as well.
	I am always heartened when the noble Baroness, Lady Howarth of Breckland, supports anything that I say. She was dead right about the reporting differences between the Food Standards Agency and the National Care Standards Commission; that was a most helpful intervention. I am pretty disappointed with the Minister's response, and this is yet another matter to which we will return on Report: it is far too important to let it run by. With that, for the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Noakes: moved Amendment No. 280:
	Page 17, line 31, at end insert "including the publication of data for the purpose of monitoring the performance of the Department of Health against its Public Service Agreements"

Baroness Noakes: The amendment is intended to ensure that CHAI will publish data that are relevant to the appraisal of whether the Department of Health has met its public service agreements (PSAs). The Committee will recall that PSAs are, to use the words of the Chancellor of the Exchequer in 1998,
	"essentially a contract for the renewal of public services".
	The theory was that departments must deliver their PSA targets if they are to receive money from the Chancellor to modernise public services. In practice, we know that the Chancellor has been pouring money into health without any regard for PSA targets.
	The Department of Health's PSA targets cover a large number of areas and the department's annual report contains a self-appraisal on how well it has done. In practice, the department has often modified the targets or put a gloss on their achievement. Let me take just one example.
	Target No. 14 of the 1998 PSA required value for money to improve by at least 3 per cent per annum. The department's annual report stated that it had met the 1998 target because it had met other non-efficiency targets. The truth is that the department had missed the target by a mile. On my calculation, based on data underpinning the department's latest annual report, the NHS had negative efficiency—that is, a loss of efficiency; not a gain—of 8 per cent between 1998 and 2001.
	There is more to value for money than activity-related productivity, but no objective data have been produced to explain how a value for money gain of 3 per cent per annum was achieved despite an activity-related efficiency loss of about 2.5 per cent per annum. We can have no more confidence about the current target of a mere 2 per cent per annum value-for-money gain.
	Because there is no policeman auditing or inspecting the department's achievements—or lack of them—those issues do not surface. Doubtless the Chancellor will conspire to spin PSAs as successful because the Government cannot bear to admit that their policies are failing, as they surely are.
	Our amendment would ensure that CHAI will publish data relating to PSA targets, so that a degree of independent judgment would be brought to bear on the Government's achievements against their targets. I beg to move.

Lord Warner: The amendment is totally misplaced. It would be inappropriate for CHAI to review the Secretary of State against his public service agreements, as he is accountable to Parliament; so it is for Parliament to question him about his actions in implementing those agreements. If there is disagreement about how the Secretary of State has behaved over public service agreements, it is for Parliament to call him to account; it is not for CHAI to monitor the performance of public service agreements. It is always open to CHAI, should it so wish, to give advice to the Secretary of State, under Clause 53, concerning the relationship between the implementation of the agreements and the provision of healthcare by NHS bodies.
	Strategic health authorities also have a key role in performance-managing aspects, such as the reduction of health inequalities, which are part of public service agreements. CHAI will also have a role in reviewing the performance of PCTs and acute trusts in tackling health inequalities. In several areas, specific parts of public service agreements will fall into the territory that CHAI will cover. But CHAI should not have an overarching duty to monitor the Secretary of State's performance against his public service agreements.

Baroness Noakes: Well, what a surprise! The Department of Health does not want to have its performance scrutinised. The amendment refers to CHAI publishing data relevant to the appraisal of whether the Department of Health had met its public service agreements. It is not about CHAI calling the Secretary of State to account; nor is it about giving an inappropriate role to a public body. Under the amendment, CHAI would have access of a very particular and privileged nature to the data that would enable judgments to be made.
	The Minister talked about strategic health authorities having a role in the delivery of some of the targets related to health equality. That is absolutely fine. CHAI would be the best placed body to have access to the data held within the strategic health authorities on the achievement of their targets. It would be best placed to say whether the data were good or bad.
	The Minister cannot realistically argue that the Department of Health and the Secretary of State for Health can continue to escape with choosing the terms by which their own performance will be judged. It is a very serious issue. I shall not press the amendment now, but I give notice that I shall return to it on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 280A not moved.]
	Clause 48 agreed to.
	Clause 49 [Annual reviews]:

Baroness Noakes: moved Amendment No. 281:
	Page 17, line 35, after "English" insert "and Welsh"

Baroness Noakes: In moving Amendment No. 281, I shall speak to the other amendments in this group. It is a long group of amendments, and I am afraid that I shall take several minutes of the Committee's time to cover various aspects of the position in Wales and related cross-border issues. We have touched on some of them, but the amendments address slightly different aspects of the Welsh issue.
	The amendments fall into two main groups. Amendments Nos. 281 to 306 together would ensure that CHAI is the inspection body for both England and Wales. Proposals in the Bill to limit CHAI to England are unacceptable, because in Wales reviews and inspections are to be carried out by the Assembly; that is, politicians in Wales. It is not only wrong in principle for the review and investigation functions in Wales to be carried out by a politically controlled organisation, it is also inefficient. How can Wales, with its much smaller health budget, begin to amass the competence and expertise that will be grown in CHAI? Why do the Government want to expose the Welsh healthcare system to a system of inspection that, by definition, will struggle compared with CHAI?
	When this matter was debated in Committee in another place, the Minister failed to produce any example of Welsh diseases being different from those in England or how the provision of healthcare in each country would be different. He certainly failed to produce an example of how patient care would in any way be enhanced by separate inspection arrangements. Devolution was not meant to mean substandard.
	The noble Baroness, Lady Finlay, who is unfortunately not in her place, referred to different incidences of disease, but that is a different matter from different diseases and different patient care solutions. The noble Baroness, Lady Andrews, tried to convince us that Wales was different when she spoke to the earlier group of amendments, but I was not convinced that they were not distinctions without a difference.
	Amendment No. 302ZA is a probing amendment to try to discover what CHAI's responsibilities are for healthcare in Wales. Clause 53 gives CHAI a number of functions of keeping both the Secretary of State and the Assembly informed about healthcare. However, as we have seen, the Bill is at pains to ensure that CHAI has very little remit in Wales. Our amendment makes it clear that CHAI should report only on things that it has looked at in Wales. Without something like this, it is difficult to see how CHAI could be expected to comply with Clause 53.
	The second group of amendments—Amendments Nos. 326 to 331 and Amendment No. 334—concern the interface between the Assembly and English NHS bodies. The amendments are predicated on the Government sticking to the Assembly keeping inspection functions and the focus of the amendments is alternative ways of keeping the Assembly out of the NHS in England. Amendment No. 326 is the most modest of the group. It amends Clause 68(1) so that the Assembly's function of reviews will be carried out,
	"where appropriate in conjunction with the CHAI".
	Amendment No. 331 is similar and states that the Assembly may request CHAI to carry out a report on an English body.
	Amendment No. 327 goes further and makes it a positive duty of the Assembly to request CHAI to do work that relates to English bodies. Amendment No. 330 restricts the Assembly's inspection rights to Welsh bodies only, coupled with Amendment No. 334, which removes the rights of the Assembly to enter premises outside Wales.
	We incline towards Amendment No. 327, because we believe that hospitals should be subject to inspection that is free from politics. That has to mean CHAI rather than the Assembly, which is no more than a bunch of politicians. It would be a retrograde step to let politicians directly into the English NHS, even if devolution has given them a free hand in Wales.
	The English hospitals that the Assembly might choose to review are already subject to review by CHAI. Indeed, CHAI would have the major inspection interest because of the dominance of English patients in English hospitals. Unless we do something positive in this Bill, English hospitals could become the subject of two inspections directed at the same issue. There is a duty to co-operate in Clause 141, which is better than nothing, but it does not take the Assembly clearly out of English hospitals.
	I will now touch briefly on Amendments Nos. 328 and 329 which concern how the Assembly should conduct its functions when there are English interests at stake. Amendment No. 328 requires the Assembly to take into account the impact of its decisions on healthcare in areas of England that border Wales. Let us suppose that the Assembly decided to review coronary care provision with the needs of only Welsh patients in mind. Its decisions could have a big impact on English hospitals and English patients and so it needs to consider cross-border implications in its reviews.
	Amendment No. 329 makes it clear that, if the Assembly is reviewing an English body, it must judge it against the standards set by the Secretary of State under Clause 45 and not the standards set for Welsh bodies under Clause 46—my noble friend has already referred to that issue. It cannot be right that English hospitals must follow both Welsh and English standards if they are different. That is burdensome for doctors and nurses who would have to inquire as to whether their patients were funded by England or Wales, which is simply nonsense. That is not the way that healthcare should develop. Much of what I have said applies also to the Assembly, CSCI and English local authorities. Amendments Nos. 361 and 399 repeat some of the CHAI amendments for CSCI. The principles are the same. I beg to move.

Baroness Andrews: This is a reprise of our earlier debate, although I take the noble Baroness's point that she has raised some different issues.
	I shall take two points that the noble Baroness made right at the beginning. She deplored what she saw flowing from the function of the Assembly as the inspectorate in Wales. She said that it was a case of politicians doing the job of inspectors. I stress the independence of Health Inspectorate Wales, which is to be put in place under the Government of Wales Act 1998. I shall not rehearse the arguments for a devolved Welsh health policy; we have gone over it a lot today.
	The new health inspectorate in Wales will enjoy exactly the same independence as other inspectorates established by the Assembly. In Wales, we already have a fine schools inspectorate, Estyn, which is completely free of the Assembly, and there has never been any criticism of its independence. The new inspectorate will be in that tradition. Likewise, the Social Services Inspectorate for Wales and the Care Standards Inspectorate for Wales have already proved their independence.
	The independence of HIW will be clearly defined in the same way. The head will be appointed through existing senior Civil Service appointment procedures. There will be complete editorial control and the right to publish. The reports will be submitted to the Assembly's Minister for Health and Social Services and commissioned by the Assembly. There will be accountability to a senior Assembly director. There will be rights of independent access, an independent complaints procedure and so on. I hope that the noble Baroness is convinced by that, as the Assembly is convinced, and by the fact that the other inspectorates work extremely well in Wales and perform their functions independently.
	The noble Baroness's second group of amendments contains some contradictory alternatives to the measures in the Bill. As noble Lords have not given notice of an intention to oppose the Question that Clause 68 stand part, I assume that the amendments were exploratory. They go from one extreme to the other: at one extreme, the amendments extend CHAI's review and investigation function to Wales and, in so doing, duplicate the power in Clause 68 for the Assembly to review services commissioned for the people of Wales under the standards set by the Assembly. We have had that debate, and we have explained why it is important.
	The remaining amendments put a fence around Wales, leaving the Assembly to review services in Wales but requiring it to ask CHAI to fulfil the Assembly's review functions in respect of English providers of services to Welsh patients. At their most permissive, they simply allow the Assembly to invite CHAI to exercise its functions in England.
	We have dealt with the more prescriptive approach. I have made the case for Health Inspectorate Wales. I hope that I have shown that it will be independent—necessarily so, as it will be locally based and sensitive to the different organisational structures and healthcare needs in Wales. The noble Baroness, Lady Finlay of Llandaff, gave us what I am sure we all agree was an astounding set of examples of why Welsh healthcare was different. The concentrations of disease are different; the morbidity patterns are different; the mortality patterns are different; and the rates of occupational disease are different. Wales needs its own sensitive organisation to deal with that.
	I reassure the Committee that we are not saying that the independent inspectorate will be introspective or isolationist in its reporting. It will co-operate with other bodies operating in Wales, including CHAI and the social services inspectorate. I have already referred to Clause 141, which imposes the duty of co-operation. It is more than a start. It will be a duty that will be implemented and observed and it is a very important safeguard.
	In relation to other issues raised—including cross-border issues—the Assembly has overall responsibility to ensure that appropriate healthcare is provided. A great deal of that is done under commissioning arrangements. The Assembly therefore needs the powers, as well as the functions, to review healthcare. Clause 68 gives the Assembly those powers. They are identical to those provided elsewhere in the Bill for CHAI, which will carry out reviews and so forth.
	The problem with Amendment No. 334 is that it would make the exercise of the power impossible. It would deny the Assembly's health inspectorate access to premises in England. Let me be clear: Clause 68 is not a carte blanche. It does not mean that HIW will wander at will across the English countryside inspecting wherever it chooses. It is a closely constrained power to review or investigate where services are commissioned.
	The border arrangements are based on years of experience. I shall not bore the Committee with the tale of my tonsillectomy when I was four years old. However, I can assure Members of the Committee that it was a very fine example of cross-border commissioning at the time, which can have only improved since then.
	It is also important to bear in mind that HIW and CHAI will not arrive at the same hospital to do the same inspection in the same way. Obviously, they will work out who has done an inspection, whether an inspection is required in the near future, and who will carry out it out. There will be the dialogue that presently exists to ensure that those arrangements are sensible. The importance of co-operation is already recognised in the Bill. Clause 121 allows CHAI and CSCI to assist the Assembly in the conduct of their general functions. On the basis of those explanations, I hope we can agree that the amendments are unnecessary.
	Amendment No. 302ZA is neither needed nor desirable. It would limit CHAI's ability to inform the Secretary of State or the Assembly about the provision of healthcare in Wales, except for national matters which it has reviewed or investigated itself. I cannot believe that this is in the interests of the NHS or patients because CHAI will have a focus on disseminating information. It will also be under a duty to co-operate and it must be able to access information that is necessary to undertake its functions. If it were denied opportunities to access relevant materials, it would impair and reduce its own function. Therefore, we know that there will be co-operation and sharing of information, not just with HIW, but with other bodies. It will be two-way traffic. CHAI will be in a position to add value to reviews—both those that it conducts and those conducted by HIW. It will not work in a vacuum, nor should the other bodies.
	The reason that the Bill places duties on CHAI and others to co-operate is to ensure that the best information is available as widely as possible. As the noble Baroness rightly says, much of the work of CHAI and HIW will be of interest and value on both sides of the Welsh border. It would be wrong to constrain either body in the manner proposed in the amendment. With that explanation, I hope that the noble Baroness will withdraw her amendment.

Baroness Noakes: As ever, I thank the noble Baroness for that comprehensive reply. This is a complex group of amendments. I shall read her necessarily complex reply in Hansard before deciding how to move forward. The noble Baroness spoke a great deal about the health inspection unit of Wales. However, the Act states that the Assembly should have those functions. That is what is so offensive in relation to access to English hospitals. The Act states that it should be the Assembly. If the Act said something else, it would be a great deal less offensive. Having politicians coming into the English NHS is simply not right. If Wales wants to do it under devolution, so be it. But that should not happen in England.
	I also raised the point about efficiency. It is not efficient to have a second unit. I carefully read the regulatory impact assessment which stated that in respect of Wales having a separate inspection unit there had been no assessment of set-up costs or running costs. It stated that,
	"it is considered that the overall costs will represent value for money".
	My response to that is: I ask you. That simply is not a credible statement. It really is not. I believe that the way in which this has been structured may well result in second-rate inspection for Wales.
	Much has been made of the differences in regard to Wales, but, although I have great respect for what the noble Baroness—and the noble Baroness, Lady Finlay—said, the issues she raised tell us no more than that there are regional differences around the United Kingdom. I could cite just as many differences in rates of morbidity and so forth as the noble Baroness did for other areas of the country. CHAI will handle regional variations standing on its head.
	I wish to make a final comment. One of my honourable friends in another place recently visited the Countess of Chester Hospital. I am sure that the noble Baroness is aware that that hospital is one of those affected to a very significant extent by cross-border issues. The person he met expressed absolute horror at the thought of inspections being carried out by both CHAI and the new healthcare inspection unit for Wales. This is a very serious issue for those trying to deliver healthcare in today's complex environment.
	The hour is late and this is not the time to pursue the matter to the bitter end, but I can say to the noble Baroness that we shall return to this issue on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Warner: I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.
	House resumed.

Prostitution

Lord Faulkner of Worcester: rose to ask Her Majesty's Government how they plan to respond to Recommendation 53 in their consultation document of July 2000 Setting the Boundaries—Reforming the Law on Sexual Offences that, "There should be a further review of the law on prostitution".
	My Lords, perhaps I may start by saying how grateful I am to other noble Lords who have indicated their wish to speak in this debate.
	My purpose in asking the Question on the Order Paper is to attempt to take forward the debate which we had earlier this year on Clause 56 of the Sexual Offences Bill. The noble Lord, Lord Lucas, and I moved amendments which sought to separate the issues of child abuse and sex trafficking from consensual adult prostitution, and we were supported by the noble Baroness, Lady Walmsley. I am delighted to see that both noble Lords are in their places and taking part in the debate.
	We all drew attention to the way that recent changes in the law have done nothing to improve the safety of women working in the sex industry. An earlier example was the prohibition of carding—placing cards advertising sexual services in phone boxes—in Sections 46 and 47 of the Criminal Justice and Police Act 2001. That made it harder for women working in the relative safety of their own flats to advertise for clients, with the consequence that many were tempted to resume soliciting on the streets, where the risk of serious assault is many times greater.
	Research carried out by the Economic and Social Research Council among indoor and street-working prostitutes in three British cities found that women working on Glasgow's streets were six times more likely to be violently attacked by clients than those working indoors in Edinburgh, and four times more likely than indoor workers in Leeds. The consequence of recent legislative changes has been that we now have some of the most punitive laws on prostitution anywhere in the world, in particular given the increasing number of anti-social behaviour orders being directed at women working in the sex industry. At the same time, we are doing little to address the vulnerability of sex workers or to tackle the influence of pimps on those women.
	Much of this was recognised by the Setting the Boundaries report team, which set as its aim the creation of a safe, just and tolerant society. But prostitution was not included in its terms of reference and it did not have access to all the latest research from different countries around the world. However, Setting the Boundaries does contain the important recommendation, and repeated in my Question, that there should be,
	"a further review of the law".
	My noble and learned friend Lord Falconer of Thoroton, speaking on 13th May in Committee on the Sexual Offences Bill, said that the Government,
	"would look to see what the scope of an appropriate review should be in all the issues surrounding prostitution".—[Official Report, 13/5/03; col. 187.]
	He indicated that on Report he hoped to say precisely what the scope of the review should be. Unfortunately, on Report, my noble and learned friend said:
	"there remains much groundwork to be done before we will be in a position to announce the timing of such a debate".—[Official Report, 9/6/03; col. 61.]
	When it comes, the review must contain a detailed examination of how other countries have changed their laws on prostitution over the past decade. In Denmark, for example, Danish-born sex workers can operate legally indoors but are not allowed to pay third parties such as pimps. Germany has designated areas where the women can work. Brothels were legalised in Holland in 2000. There, women pay their taxes, take out health insurance and receive social welfare benefits. Brothels are seen in Holland as professional businesses, which can be inspected at any time, like other businesses, to make sure that they comply with labour laws. The premises have strict rules about hygiene and condom use. Any form of forced prostitution, pimping or trafficking is illegal.
	Earlier this year, New Zealand passed the Prostitution Reform Bill. The philosophy behind it—which might, I suspect, be shared by many of your Lordships—is that prostitution is neither condoned nor condemned. It is acknowledged that prostitution can be harmful to sex workers and that that harm should be addressed by legislative means. The Bill had the stated aims of safeguarding the human rights of sex workers; protecting sex workers from exploitation; promoting the welfare and occupational safety and health of sex workers; creating an environment that is conducive to public health; and protecting children from exploitation in relation to prostitution. The New Zealand Parliament believes that criminalisation is not the way to achieve these aims and that it is better to focus on decriminalisation, improving standards and protection.
	Decriminalisation is also the approach adopted by the state parliament in New South Wales, Australia. Since 1995, prostitutes are permitted to work away from the streets in well-run brothels which operate without interference from the police. There are offences relating to coercion and advertising premises for prostitution, and soliciting in a street near to a school, dwelling, church or hospital is prohibited.
	Its neighbouring state, Victoria, has gone in a different direction. There it has adopted a licensing and planning permit approach, and only persons who obtain a licence from the Business Licensing Authority can lawfully offer a prostitution service. The BLA also, in a very matter of fact way, licenses motor-car traders, estate agents, credit providers, introduction agents, pawnbrokers and travel agents—an interesting combination of trades and professions. Street soliciting was made illegal in Victoria for both clients and prostitutes. There are strict rules on what is allowed in the licensed premises. The manager or licensee has to be present at all times; no alcohol, no drugs and no one under the age of 18 are permitted.
	I was recently in Melbourne on a Commonwealth Parliamentary Association delegation to Australia and was able to meet senior officials of the Business Licensing Authority and to see one of these operations at first hand. I was chaperoned by one of the BLA officials and by a senior Conservative Member of another place who was a fellow CPA delegate. We visited one of the leading brothels in the city of Melbourne. The other one, of a comparable size, is so successful that it has a Stock Exchange listing.
	It was a pretty cheerless establishment, with dingy furniture and threadbare carpets. But it was clean and the rules on drugs and alcohol were strictly observed, as were the requirements for showers, clean towels, panic buttons and the provision of condoms.
	On speaking to some of the sex workers, they appeared quite articulate. One had worked on the streets around Leicester Square in London, which she said had been a terrifying experience, particularly compared with the relative security of a licensed premises in Melbourne. I was told by a number of people that the principles underlying the legislation had included a determination to keep out organised crime, and in pursuit of this no licensee can operate more than one business. People with convictions for dishonesty or violence are not granted licences—they are given only to persons of good repute.
	Critics of the Victoria regime argue that it is bureaucratic, as the costs of administering it exceed revenue from licence fees two to three times over. It is also admitted that there are still large numbers of unauthorised premises—at least as many again, and perhaps more.
	The administrators also admit that they are not doing enough to encourage sex workers to leave the industry. This last criticism has been taken up by representatives of the Christian Churches in New Zealand. A highly respected opponent of the new New Zealand law is Bishop Richard Randerson, Dean of Holy Trinity Cathedral in Auckland. He urged his Government to work with the Church and other social service agencies to address the economic factors driving many into prostitution and do more to help people leave the sex industry through programmes on health, housing, education, employment and drug detoxification.
	Bishop Randerson and his fellow Church leaders prefer the approach adopted by the Swedish Government, which is one country I have not yet mentioned. Sweden has unambiguously adopted a pro-feminist position, arguing that prostitution is a form of male social violence, with women sex workers as its victims. In 1999, the law in Sweden was changed, criminalising the clients of prostitutes. Purchasing sexual services carries a penalty of a fine or up to six months' imprisonment. It relates to all forms of prostitution, whether purchased in the street, in brothels or in massage parlours. No criminal sanctions apply to sex workers.
	There are mixed accounts of what the new law in Sweden has achieved. On the one hand, it is claimed that it has drastically reduced the number of prostitutes on the streets of the major cities. But the prostitute women groups say that it has made things less safe for them, and there are anecdotes that large numbers of men now travel over the border to Norway to buy sex.
	Other countries—more enlightened than ourselves—are tackling prostitution quite differently from us, as this brief account describes. While they differ markedly in their practical application, they are consistent in one respect—they take seriously the rights of women who take part in the sex industry and seek, by a variety of means, to make life safer for them and to improve their health and well-being and, in many cases, actively encourage them to leave the industry.
	With the greatest respect to my noble friend and her colleagues in the Government, very little of the legislation we have passed here over the past three decades comes anywhere near doing what other countries are attempting. That is why we need the review, and we need it now.

Lord Brooke of Sutton Mandeville: My Lords, I pay tribute to the noble Lord, Lord Faulkner of Worcester, for securing this debate and for introducing this important topic as he did. Although I was not present during the earlier debate to which he alluded, I am, however, very familiar with the carding issue he referred to then.
	The noble Lord said to me, prior to the debate, that it would be good to hear a former Member of Parliament for Soho on this subject. I am not at all sure about that, but it is by generalising from my narrow experience as an inner London MP that I want to contribute to the debate, and on the equally narrow point that others are affected by prostitution than simply the prostitute and her, or his, client.
	Although the understandable shorthand of your Lordships' House abbreviated this Unstarred Question to the single word "Prostitution", the actual and full words of the Question on the Notices and Orders of the Day, as the noble Lord, Lord Faulkner, said, ask the Government about their response to Recommendation 53 in the consultation document of July 2000, namely that there should be a further review of the law on prostitution. Those were the final words of Chapter 7 of Setting the Boundaries, the chapter devoted to trafficking and sexual exploitation. The opening paragraph of the chapter included the sentence:
	"It is important to emphasise that we are not looking at how or whether prostitution should be legal or illegal: that is beyond our remit".
	The Question of the noble Lord, Lord Faulkner, implies that the Government's plan on how to respond to Recommendation 53 is still awaited. It may be that we shall receive the answer tonight, when the noble Baroness the Minister winds up, although, looking at her face, I suspect we may not. Until the Government respond, noble Lords are entitled to adduce issues for consideration. Mine come under the penultimate sentence of paragraph 7.8.1 in the same relevant Chapter 7, which states:
	"Communities are very concerned about overt prostitution in their midst, and about the linkage between sex markets and other forms of criminality, including drugs".
	On three occasions during my 24 years as Member of Parliament for the Cities of London and Westminster, the concerns identified in the sentence that I have quoted became so acute in three different parts of south Westminster that I was obliged to seek the time and attention of three Home Office Ministers—two Home Secretaries and one Minister of State. Two of them are, sadly, now dead, but the noble Lord, Lord Rees, the earliest of them, is still, happily, very much with us. All three Ministers were responsive.
	The British, and inner Londoners in particular, are live and let live people. However, on all three occasions—in Mayfair, Soho and St Marylebone—the chafing irritation and environmental disturbance had become locally so intolerable, not only to residents but, in at least two cases out of three, to the butcher, the baker and the candlestick maker as well, that they came to me about it.
	There has always been a tradition of areas of critical mass in London in terms of prostitution. In what I say next, I eschew any personal reputation for erudition, but I pay tribute to Stephen Inwood's A History of London, whose 936 pages I reviewed some five years ago. The Westminster tradition of prostitution is an old one. A 13th century traveller listed the whores of Charing—now Charing Cross—among the sights of London alongside the relics of Westminster and the churchyard of St Paul's. I fear some of their custom came from the entourages of the Royal Palace and of Westminster Abbey, but from the 12th to the 17th century, the south bank of the river was notorious for being the heart of the trade.
	Seven Bankside "stewmongers" paid the poll tax in 1381, and were all making a good living. The Southwark "stews", or more recognisably brothels, were regulated by ordinances issued in the 15th century by the then Bishop of Winchester, controlling rents and opening days, banning enticement and the sale of food and drink, forbidding the employment of diseased, married or unwilling women, and insisting that a prostitute who took money from a customer should, "ly still with him" all night.
	Henry VIII brought this early experiment in state-regulated prostitution to an abrupt end by ordering the closure of the Southwark stews in 1546, but the prostitutes simply reappeared in Shoreditch, in St Katharine's by the Tower or in Holborn. The City itself had—and I think still has—four Love Lanes, three Maiden Lanes and a final lane, now renamed, whose original name I cannot repeat in your Lordships' House, where I regard Hansard as the equivalent of a family newspaper. The prostitutes also congregated in Smithfield but they returned to Southwark, then under the City's jurisdiction, before finally transferring to Covent Garden in the 17th century.
	Thereafter Mrs Goadby of Berwick Street in Soho, Mother Needham of St James's and Molly King and Mother Douglas of Covent Garden were familiar figures in contemporary novels and prints and, at the turn of the 18th century, sex tourists in London could even buy a guidebook entitled Harris's Book of Covent Garden Ladies. When the gates of St James's Park were locked at night, the grounds were patrolled by prostitutes and, as we learn from Boswell, by their customers.
	Even in the 19th century the very comprehensive Metropolitan Police Act of 1839 did not give the police a right to enter what by 1850 had become the 3,000 brothels of the metropolis. Prostitutes were still openly present in theatres to attract custom, as they had been when the 16th century theatres were still on the south bank. The effect in the 19th century was to drive respectable and fashionable families from drama to the opera. Prostitutes still lined the streets in St James's, Covent Garden, Marylebone and Whitechapel, and the 30 or so arrests on a typical night were mainly for being drunk or disorderly. The Home Secretary in 1857 annotated a letter with the sentence:
	"An attempt to suppress these things by legislation would be quite absurd".
	The past century is more familiar to all of us so I shall not extend this backdrop save to say that from the 1930s the Messinas of Soho, an Italian family, imported Belgian, French, Italian and Spanish girls, installing them in flats in the West End in the same way that the Albanians are now said to preside over most of an empire in Soho alone whose takings were—so the source document for this debate says—£1 million a month in the year 2000, while profit from the London area as a whole ranged between a quarter of a billion pounds and half a billion pounds.
	I have gone into this history at some length to make the point that such concentrations of activity are bound to impinge on the neighbourhoods in which they are situated. Of the three cases I brought before Home Office Ministers, the first and third, in Mayfair and Marylebone, were resolved by putting in considerable police manpower—and, in the case of Mayfair, womanpower as 24 women police constables were deployed for months in a very confined area. But the consequence, of course, was that the prostitutes simply decamped either to King's Cross or to Tooting or elsewhither, and that has separate consequences for those unintended destination communities.
	The case in Soho was rather different. There, by 1980, there were 164 distinct sex establishments established within the bounds of Soho, and no sign that they would not flood outside Soho into adjacent neighbourhoods. They were not, of course, all practising prostitution but the effect of environmental pollution on the butcher, the baker and the candlestick maker, and their residential customers, was the same.
	I put the problem to the late and still lamented Lord Whitelaw, as he then was not. I have to say that his officials were not keen that he should respond, but he took me at my word about critical mass, and the licensing of sex establishments legislation was the result, leaving to local authorities the right to determine the number of licences. The effect on Soho residents and on decent traders was benign in the extreme and Soho owes its multi-faceted prosperity and, indeed, attractions over the past two decades to it.
	What, therefore, this speech amounts to is a plea to the Government that, if they are minded to review the laws on prostitution, they should bear these considerations in mind. When we debated the Licensing Bill the Government were patently surprised by some of the evidence of conditions on the ground in inner cities—Manchester, for instance, as well as London—adduced by the Opposition Benches; evidence which in turn was likely to militate against the Deputy Prime Minister's plans for urban regeneration.
	I say a final word about the contemporary scene. The Albanians who have taken over from the Italians are accustomed to settle matters with a knife. The Jamaicans who have brought crack cocaine into Soho in the manner described in the sentence I quoted earlier, do so with a gun. Either of these is unattractive in the heart of London's leisure industry and tourist district. The lesson is to see whether by legislation we can secure dispersal of the sex industry instead of concentration. Lest I seem preoccupied by the involuntary spectators and their experience, let me close by saying that I feel profound sympathy for the eastern European girls whom the Albanians bring here, who I suspect would have fallen foul of at least one, but probably rather more, of the Bishop of Winchester's 15th century rules in the Southwark stews.

Lord Carey of Clifton: My Lords, I am grateful for the opportunity to offer some brief thoughts on this debate. I am particularly grateful to the noble Lord, Lord Faulkner, for his determination to get a thorough appraisal of laws relating to prostitution. As I am sure is the case with other noble Lords, I am also grateful to the noble Lord, Lord Brooke of Sutton Mandeville, for his historical survey. If I understood the noble Lord correctly, it appears that the Bishop of Winchester to whom he referred had a lot to answer for.
	No doubt when a former Archbishop of Canterbury stands up to speak about prostitution it is assumed that he will be against it. I shall not disappoint your Lordships on that conclusion. For moral reasons I am against prostitution. It is the most liquid and transitory of relationships undermining marriage as well as communities.
	However, it is not the moral argument that I wish to address but broader issues relating to the compassion and care which I believe to be at the heart of the concerns of the noble Lord, Lord Faulkner. I recognise that in the past the Church, along with other sections of society, has been so concerned to maintain moral rectitude and high standards that our attitude to women engaged in prostitution has been less than Christian. It has been harsh, unfeeling, uncaring and condemnatory. We have assumed that women engaged in such activities are worthy of society's disapproval and punishment. In recoiling, we have abandoned the possibility of making a difference to their lives. I recently read Dr Helen Self's book Prostitution, Women and Misuse of the Law, which I commend to noble Lords.
	My attitude on the issue changed some years ago when I met a young prostitute who started on the game, as it is called, when she was in her very early teens. When I met her she was already a reformed character, having been befriended by a church group and given a home for herself and her two small children. I was so taken by her honesty and determination to better herself that my wife and I linked up with her and became very good friends with her. We began to support her. To my surprise, four years ago she told me that she felt called to the ordained ministry. She is now a priest in the Church of England, a happy, intelligent young woman who is proving to be an excellent minister. But her story is disturbing. She had a terrible start in life, being thrown on the streets, destitute and lonely. She was abused by pimps and let down by authority. She was arrested when she was 15 and found herself on a charge sheet. She now had a record, and the way was barred to do something more useful with her life. She told me that she had known violence, intimidation, abuse and fear. It is a miracle that she is now a reformed person who can speak of God's love with an authenticity that most sermons lack. She is quite convinced that present laws work against the chances of women breaking free of prostitution or escaping from a culture of violence that intimidates many women trapped in it. She has expressed her willingness to come to the House of Lords to meet as many Peers as want to hear her story, and I would be most willing to arrange that if there were a sufficient number.
	Although it is true the Church has been uncompassionate and uncaring, that is not the total picture. The noble Lord, Lord Faulkner, mentioned the Church in New Zealand, and there are many illustrations of caring Christians working among prostitutes, providing hospitality and unjudgmental care. A few days ago, I was talking with a young woman who works with several other youngsters in a Christian project in Spitalfields. Last year, they gave support to 223 different prostitutes, listening to their concerns and endeavouring to show them a better lifestyle.
	In the vast majority of cases, the women have not chosen that way of life because it gives them an enjoyable lifestyle, a comfortable existence and the chance to meet a nicer kind of person. They live that way, in the majority of cases, because of lack of hope. Many end up on the street because of drug abuse. For some, it is part of an inevitable spiral that started with sexual abuse in childhood. Out of sight, of course, are the many unknown women kept in almost slave-like conditions by gangs who feed off their earnings.
	The urgent question is, "What can we do?". As we have heard, it would be foolish to return to the old days of punitive legislation in an attempt to reduce numbers and clear up streets because of public cries of, "Not in my backyard". We need legislation that will protect vulnerable people and chastise those most guilty of abusing them. As I understand it, the current law is somewhat contradictory. The law pushes women on to the streets through the Sexual Offences Act 1956 and off the streets through the Street Offences Act 1959. The Sexual Offences Act 1985 forces them to make rapid and sometimes dangerous judgments before jumping into a stranger's car, sometimes with dreadful consequences.
	In case of misunderstanding, I want to repeat that I am against prostitution on moral grounds. Prostitution mocks women by making them a commodity, cheapens and devalues sexual relationships, and demeans us all as societies. However, it is for different moral reasons that I make a contribution to the debate. My instinct tells me that our current attitude towards prostitution raises urgent moral questions that a good and civilised society needs to address. We will not get rid of prostitution by condemning it and sanitising it by removing it far from public gaze. Perhaps we shall diminish it as a social problem only when we care more deeply for the women who are its victims. Therefore, I support the noble Lord's appeal for a review of the law as far as it affects prostitution.

Lord Lucas: My Lords, this is the first time in almost 12 years in this House that I have attended or participated in a debate in which no noble Lord has claimed any direct knowledge of the subject at hand. But for all that, I have listened to three informative speeches, all of which I agree with. We live in an understanding age and it is time to take a step back and say that we know prostitution is going to take place and that we want to make the conditions under which it takes place the most agreeable and sensible for everyone who gets involved.
	I share the position which the noble Lord, Lord Faulkner, has taken: we must give priority to the safety of the women who involve themselves in this trade in order to ensure that they are safe from attack, are not exploited by other people and can undertake their trade in reasonable circumstances. At the top end of the trade, as we have learnt from recent newspaper reports, it can be extremely profitable. It works out at about £4,000 a week, according to reports of the convent-educated madam who is being tried in France. That is almost what a lawyer earns and the equivalent seems to me to be entirely reasonable.
	At the lower end, women are exploited in an awful way. They are hooked on drugs and enslaved to pimps. That happens because they are forced to ply their trade in ways that are fundamentally unsafe. They are denied access to the very aspects of our society—namely, the police and other helping agencies—who should be their supporters in these circumstances. It is time that we looked at how we can set our laws to rights, rather than every few years being happy at the extension of anti-social behaviour orders to prostitutes, as if that were an answer to the situation. It is just a medieval suppression of the trade and is absolutely no answer at all.
	Equally to be supported are my noble friend's arguments about the people among whom the trade is plied. If there is a concentration of it, it becomes extremely anti-social behaviour to have going on around one. The answer to concentration is to enable prostitutes freely to advertise. Prostitutes turn up together in one place because that is where they can be found. We have laws against putting stickers in telephone boxes and we also have laws which prevent the stickers going up in private places, in newsagents or in sex shops. It is hard to find the legal location of other prostitutes, but if we remove the laws which prevent the proper advertising of prostitution services, it will no longer be necessary for people to concentrate together. Indeed, there will probably be an advantage in spreading out; you would be more local to the clients rather than asking them to travel long distances to wherever you might be.
	There are changes we can make in the law which will benefit both sides and recognise that, yes, we want the prostitutes to be safe, but, yes, we want to be able to live our lives pretty well unconscious of the trade, if that is what we want to do. I suspect that that is the position most of us would like to find ourselves in.
	I do not know whether the Government are the right people to review this matter. There is such a political downside and such a risk of sticking oneself up as a patsy for the Daily Mail on a bad day that I cannot see politicians really wanting to become involved in this type of thing or wanting to say, "Well, this is an original document coming from the Government"—whether it is Labour or Conservative—"as party policy". I believe that that is what Royal Commissions are for. That would provide a chance for things to be discussed in public, for all sides to have their say and for conclusions to be produced which are not associated with one party or the other and which, indeed, with luck, might command a degree of all-round support. I should have thought that that was the kind of forum we should be seeking, but I do not know that judges will be queuing up to be in charge of it.
	However, if we could move forward on that basis and give ourselves time to think and time to talk this through in a forum where no one would feel difficult about expressing, or holding, their views, I should be delighted. It is so unsatisfactory to allow things to carry on as they are. So many people are being hurt by it.

Baroness Walmsley: My Lords, I add my congratulations to the noble Lord, Lord Faulkner of Worcester, on securing this debate and on the very clear way that he laid out the issues before us this evening. I also want to congratulate Dr Helen Self on her excellent book on the subject of prostitution, which the noble and right reverend Lord, Lord Carey of Clifton, has just recommended to us.
	It has been a very interesting debate on a vitally important issue. It is important not just to those who are actually involved in the sex trade but also to local communities who are affected by it, as was so colourfully described by the noble Lord, Lord Brooke of Sutton Mandeville. As he was speaking, I found myself thinking that perhaps we are today's equivalent of the relics of Westminster that he mentioned.
	However, to be more serious, there is much evidence that the incidence of prostitution is on the increase, and the Government cannot, and I am sure do not wish to, ignore the vast amount of human misery that the sex trade represents. In answer to a parliamentary Question from Dr Brian Iddon as far back as March this year, the Minister, Hilary Benn, said that the Home Secretary was,
	"examining the scope for a review of [the law on] prostitution".—[Official Report, Commons, 24/3/03; col. 16.]
	As that was seven months ago, I hope that the Minister will be able to tell us this evening that a plan for such a review is now in place. To do so would demonstrate considerable and welcome political courage.
	On these Benches, we believe that few women or men voluntarily choose to be sex workers, although they have a right to do so. Most of them feel forced into it. The causes of that are various, but the main ones are undoubtedly poverty and sexual abuse, as well as drug addition. Increases in homelessness and lack of access to benefits have made many young people vulnerable to those who offer them money, shelter or drugs in return for sex. Numerous studies have identified strong links between prostitution and sexual abuse in childhood. That is why it is so vital to break the cycle of sexual abuse of children through all the initiatives that the Government are undertaking, and more.
	Three overarching factors are clear to me when considering what to do: first, that sex workers are more often than not victims themselves and we should treat them as vulnerable people to be helped, not harassed; secondly, that prostitution is more a public health issue than a public order issue; and, thirdly, that this is an international issue and our solutions should take into account lessons learnt in other countries and contain elements of co-operation—they will not work in isolation.
	Those involved with prostitution are increasingly at risk from violence, disease and drug addiction—if, indeed, the addiction was not one of the prime causes of the prostitution in the first place. Although the Government's drugs policies are not the subject of our debate this evening, they are clearly very relevant to it. If you find effective ways of reducing the number of people addicted to hard drugs, you will reduce a major push factor into the sex trade.
	Then there is the international dimension. Many of the prostitutes working in the UK have been trafficked from abroad. In his evidence to the Setting the Boundaries team, Inspector Paul Holmes of the Metropolitan Police estimated that as many as 75 per cent of sex workers in London are foreign, and, as we have heard, most of them come from the Balkans. Another witness said that in eastern Europe 80 to 90 per cent of the new unemployed are women who have few opportunities to gain employment any other way. Many, although not actually imprisoned, are virtually imprisoned here because of their lack of English and fear of the police. They know that they are here illegally, although many were lured here with promises of legitimate jobs and a better life. So they fear deportation if they are caught. That could mean rejection by their families, or worse, when they go home.
	Clearly, the way we deal with these women requires enormous sensitivity, understanding and the compassion urged upon us by the noble Lord, Lord Carey of Clifton, as well as joined-up action on the part of the police and immigration services. Can the Minister tell the House how the two services are working together to address the massive problem of people being trafficked to this country to be exploited for sex?
	Inspector Holmes made it clear that it is very difficult to get the women to testify against those who exploit them. Instead, police action has to be based on intelligence so it is vital that some of that fear is taken away by the implementation of new policies.
	Unfortunately, although selling sex is not illegal, the current legal framework surrounding prostitution pushes prostitutes into a criminal sub-culture which does not serve the needs of the police, the sex workers or the communities where they cause a nuisance. I very much agree with the noble Lord, Lord Lucas, although I forgive him for ignoring the possibility of a future Liberal Democrat government, that giving a prostitute a series of anti-social behaviour orders for soliciting is not a serious and positive contribution to the problem. That is why it is vital that we have a full review and consider the options as well as the experiences of other countries where they have experimented with changes to the law.
	Liberal Democrats believe that no one of either gender should be obliged to become a sex worker. Various related public policies can reduce that pressure. Ensuring that everyone obtains a good education or training; enhancing the economic independence of women and young people; improving the benefits system; ensuring good, affordable child care for those young mothers who want to work legitimately and working to combat sexual abuse of women and children would all help. The Government are doing a good deal but there is always more to do.
	We also believe that the Government must face up to the public health implications of the sex trade. To neglect that is short-sighted in view of the immense dangers of HIV and other sexually-transmitted diseases as well as the health dangers associated with drug abuse.
	We believe that local health authorities should be responsible for health care, outreach, education and HIV prevention services for male and female prostitutes and their clients to promote safer sex practices and reduce the incidence of HIV. That would be much easier to do in a regime where the sex trade was regulated and not pushed underground.
	Therefore, we believe that the current laws that force prostitutes into the criminal sub-culture should be repealed and replaced after appropriate consultation with a realistic, fairer more effective framework of law specifically designed to protect vulnerable individuals, to regulate prostitution and to prevent nuisance.
	We would replace the ineffective legislation on kerb crawling and soliciting with a new offence of harassment covering the behaviour of pimps, prostitutes and clients. Although we are opposed to the establishment of state or local authority run brothels, we would want to see a system to regulate the activities of privately owned brothels. That would allow the full range of inspections to take place and the full range of health and welfare services to reach the sex workers.
	The safety, well-being and human rights of these vulnerable women—they usually are women but in some cases men—must be paramount. Many of the young women concerned are mothers. Thousands of children are affected indirectly by the sex trade because their mothers are involved in it. If we want to improve their life chances we must improve those of their mothers.
	For the sake of the communities that feel threatened and the vulnerable exploited people forced into prostitution and their children, I urge the Government to comply with recommendation 53 of the Setting the Boundaries report.

Viscount Bridgeman: My Lords, I am sure we are all very grateful to the noble Lord, Lord Faulkner, for initiating this debate and for giving us such a very comprehensive outline of the practice in other countries.
	To say that we are dealing with the oldest profession in the world may be of little comfort at the start of my speech. Nevertheless, it is worth recalling the legislative landmarks on the subject over the past 150 years. Conveniently, my noble friend Lord Brooke of Sutton Mandeville has covered the earlier period.
	While never entirely accepted, prostitution has been widely tolerated at various times in history, as we have heard. The Vagrancy Act 1824 was an attempt to exert extensive control over women on the streets through wide discretionary powers to arrest anyone acting suspiciously or in a riotous or indecent manner. However, in the 1860s a series of Contagious Diseases Acts introduced extensive powers to control prostitution as a public nuisance with public offences of loitering, soliciting and spreading venereal disease committed by the female prostitute. It is interesting that as early as the 1880s these measures were so hotly contested by contemporary feminists and working men that in 1886 these Acts were repealed.
	The next milestone was the Wolfenden Committee on Homosexual Offences and Prostitution, which was established in 1954. That led to the Sexual Offences Act 1956 and the Street Offences Act 1959. Those Acts provided neighbourhood respectability since they drove prostitutes off the streets. But, significantly, it was the nuisance of prostitution which they addressed and not the exploitation of women. The 1956 Act attempted to deal with the exploitation by third parties by way of association and economic factors, by introducing the offences of "brothel keeping" for female offenders and "living off immoral earnings" for male offenders.
	However, prosecutions for either "pimping" or "brothel keeping" have been minimal. Police complain that prosecutions involve lengthy observation which takes time and absorbs a lot of manpower and there is often a lack of evidence that the man has lived off the women's sex work. I shall return to that point.
	An important development of the 1956 Act was an attempt for the first time to introduce equality between the prostitute and client by introducing the offence of "kerb-crawling". Again this proved difficult to enforce, though the effectiveness of enforcement and prosecution has been considerably improved under the Criminal Justice and Police Act 2001. So it was an important and much needed initiative when the Government launched the Setting the Boundaries review in January 1999.
	It was, if I may say so, a wise decision to restrict the terms of reference for that inquiry. It did not, for instance, examine the legal base for the regulation of prostitution or in what circumstances it could or should be legalised. It did, however, consider the offences relating to the sexual exploitation of individuals in prostitution with two important new offences—one of the sexual exploitation of adults—which were given effect to in the Sexual Offences Bill, which has just passed through your Lordships' House. Perhaps I may say how fortunate we are to have the noble Lord, Lord Faulkner, and my noble friend Lord Lucas who were very closely involved with that Bill. There was also an important recommendation that the law on soliciting should apply equally to men and women.
	One of the most important aspects of this Bill is the section on trafficking, which draws on a Home Office paper which identified that trafficking for sexual purposes is a two-way movement: into countries which have existing sex industries which can absorb them and from countries where there is an indigenous sex industry. The report also highlighted the effect of the derisory sentences, which is a powerful disincentive to the allocation of police resources to what is in any case an unpopular role within the service.
	The Sexual Offences Bill identifies three separate offences: trafficking respectively into, within and out of the United Kingdom for sexual exploitation. This last category covers the re-export of girls to be forced into prostitution abroad; for example, West African girls being sent to Italy. Each of these categories carries a maximum sentence of 14 years' imprisonment.
	What should be our ideas for the future? One alternative, which has been raised in the debate, is some form of legalisation of brothels. Theoretically, that has attractions. It should get the girls off the streets, look after their health and so on, and it has been advocated by several senior police officers. However, experience has shown that it is not so simple.
	My information on Melbourne comes from considerably earlier than that of the noble Lord, Lord Faulkner, to whom I must defer on the subject, but I am advised that in Melbourne, where brothels have been licensed since 1984, it is the old story: conditions have improved for the clients but not for the prostitutes. The latter have no control over their clients and are liable to be abused by the brothel managers. In some instances, they are required to sign contracts waiving their civil rights and entitlement to statutory health and safety protections. However, in view of what the noble Lord said, the state of Victoria should be given the benefit of the doubt.
	The so-called Eros Centres in Germany have been similarly described as a reversion to neo-slavery. In the state of Nevada in the United States, even the social lives of prostitutes are strictly controlled. It has been found that even in that regulated environment, sexually transmitted diseases are difficult to detect quickly and the prostitutes become adept at concealing them to avoid ejection from the brothel. Significantly, in many legalised brothels throughout the world there is a high proportion of women from disadvantaged ethnic communities.
	Then there is the decriminalisation argument, based on the acceptance in some quarters that prostitution is inevitable. That view is widely held both in the probation service and in certain police forces. The English Collective of Prostitutes advances the seductive—if I may use that word—argument that prostitution is a victimless crime. Against that there is the argument that prostitution is not empowering for women, despite the beguiling picture of economic freedom presented by traffickers to women, especially from the Far East and the Balkans.
	Then there is the "zones of tolerance"—which, like decriminalisation, are superficially attractive—which have been established in Utrecht and Amsterdam in Holland and attract substantial interest in this country, particularly in Birmingham. In theory this should produce prostitute free and kerb-crawling free zones, but prostitutes complain of harassment from outside the zone and little protection within it. Their economic point of view is that a police presence discourages the clients.
	Finally, there is eradication, with harsher penalties for women entering prostitution; strong support mechanisms for those wishing to leave the industry; and full criminalisation of the client and pimp, with more effective and harsher penalties. There is growing support for that approach both within the United Kingdom and in several states in the United States.
	I refer your Lordships to an interesting article that appeared in the Herald in Scotland. It contrasted the attitudes to prostitution of Edinburgh—with its reputation for propriety and respectability—with the more warm-hearted and tolerant Glasgow. The policies were exactly the opposite of what might have been expected. Edinburgh's attitude is relaxed, based, among other things, on an experiment with "tolerance zones".
	I should mention that in Edinburgh there was a well-known lady called Mrs Noy who was a Tory and used to turn up at Conservative fetes—to the great embarrassment and humiliation of the Conservative Member of Parliament. I fear that takes us back a year or two, in any case. She further had a sign in her window that read, "Life is better under the Tories".
	By contrast, the Glasgow approach is very strict. I quote a spokesman:
	"our goal is to work towards the elimination of prostitution, not the tolerance of it".
	In fact, neither approach has been a success. The zones of tolerance in Edinburgh have been abandoned and there is certainly no diminution of prostitution in Glasgow, with three recent particularly nasty murders of prostitutes and the unpleasant statistic advanced by the noble Lord, Lord Faulkner. So there is no quick fix, as the noble and right reverend Lord, Lord Carey, said.
	I finish by citing material derived from a perceptive paper by Catherine Benson and Roger Matthews in the International Journal of the Sociology of Law in 1995. It gives the crude and unadorned picture of the darker side of the lives of women engaged in street prostitution. The first point was made by several of your Lordships: the majority of women working as prostitutes have economic, social and heath-related problems. That was especially highlighted by the noble Baroness, Lady Walmsley. The myth of the "happy hooker" is indeed a myth. Prostitutes almost always suffer from some degree of dependency. The next point is that women who work on the streets are the repeated targets for sexual and violent physical attacks. Twenty-seven per cent of street prostitutes interviewed admitted being raped in the past 12 months. A further 43 per cent had suffered some form of physical assault or abuse. The majority of clients have regular partners or are married. Many kerb-crawlers are middle-aged or middle class.
	Significantly, the regulation of prostitution is low-status police work. Police response tends to be reactive rather than proactive, often, largely, to placate local residents. As one vice squad officer explained, "You have got to be seen to be doing something, even if they [the prostitutes] do just go straight back out there. If we didn't, we would be overrun with girls and complaints about them".
	Despite growing inequalities over the past 20 years, the number of prostitutes working in the streets in the majority of areas has either remained constant or decreased. The problem will not go away.
	The Government are to be commended on the Sexual Offences Bill, in particular. But I shall leave the Minister with two thoughts, both covered by noble Lords who have spoken today. The least society owes those women is to improve their safety—I echo my noble friend Lord Lucas. Society also owes them the provision of every practicable facility for an exit route by providing counselling, rehabilitation and safe houses. I finish by saying what a heart-warming story we heard from the noble and right reverend Lord, Lord Carey, to which the noble Baroness, Lady Walmsley, has also referred. With those two thoughts, I very much look forward to hearing what the Minister says.

Baroness Scotland of Asthal: My Lords, I add my voice to those of all noble Lords who have thanked my noble friend Lord Faulkner for provoking such a wide-ranging and thoughtful debate. I can only agree with him that the time is right for a sensible debate on the issues arising from prostitution. There has been no such discussion for more than 50 years. Issues arising from prostitution are numerous and complex. One should remember the words of the noble Viscount, Lord Bridgeman, who referred to the comprehensive nature of what has been tried internationally, much of which has failed.
	I have rarely heard such a wide-ranging and thoughtful exposition of the history as we had the advantage of hearing from the noble Lord, Lord Brooke. It is important, because it emphasised the observation by the noble Viscount, Lord Bridgeman, that there is no quick fix. It is a difficult issue that will need a lot of very careful thought. We must consider all the available options, however radical. There are no easy answers, therefore, but that does not mean that it is an issue from which we can afford to shy away.
	I, too, was very touched by what the noble and right reverend Lord, Lord Carey of Clifton, said. He rightly emphasised the need for compassion and care, but also that there is redemption and possibility of change. Those women who are given a route out of prostitution can make an enormously valuable contribution to our country.
	Many who become involved in prostitution do so at a very young age, as the noble and right reverend Lord, Lord Carey, told us. Those children are victims of abuse, pure and simple. We are determined that the law should be sufficiently robust to ensure that we can act swiftly and firmly to stop those predatory individuals who use and abuse young people in that way.
	Prostitution also makes victims of women—and indeed a significant number of men—who are exploited by their pimps and abused by their clients. It also makes victims of those communities in which the sex trade takes place on the streets or in neighbouring flats. I was very pleased that the noble Lord, Lord Brooke of Sutton Mandeville, rightly emphasised that aspect of the difficulty. From noble Lords' remarks, it may be said that it was ever thus and that over the past 700 years we have tried virtually every model that there is. However, try we must continue to do. I know that some noble Lords are disappointed that the review on sex offences, which led to the introduction of the Sex Offences Bill, did not fully cover prostitution. I warmly thank the noble Viscount, Lord Bridgeman, for his congratulations on what we did do, because we made some important strides forward.
	At the time, the sex offences review team considered that the issues surrounding prostitution went much wider than the remit of that law review. However, it was recognised that, although it is important to ensure that the legal framework is right, it is equally important to look at how the law is enforced, and, indeed, to look at other ways of tackling the issue. Enforcement has been at the heart of what we have talked about this evening. This will include preventive strategies to stop young people from being drawn into prostitution, support for those who find themselves involved in it, and a range of measures to deal with the practical impact of prostitution on our communities.
	It is also instructive to look at models of good practice from around the country, and indeed from around the world. We have had some clear examples of that tonight, by my noble friend, Lord Faulkner, and from the noble Viscount, Lord Bridgeman. All in all, it was considered that the issues arising from prostitution were so wide-ranging that they demanded a separate review. I am pleased to say that the Government accepted that recommendation, and we are now acting upon it by scoping the issues for a review dedicated to exploring the problems arising from prostitution. I bear in mind what the noble Lord, Lord Lucus, said about politicians not having the stomach or courage for the task, but I assure noble Lords that this Government do.
	The Home Office is leading this scoping exercise, working with an inter-departmental group of officials. The team is also consulting key stakeholders from outside the Government, including the criminal justice agencies, the statutory services, voluntary groups and academics. The team will also ensure that the voices of those with first-hand experience of involvement in prostitution will be heard.
	That is not a straightforward process, as noble Lords will appreciate. The issues associated with prostitution are numerous and complex, and we want to make sure that we have explored the issues fully. For that reason I am unable to be specific about the timing of the review, but we will ensure that all those who have been involved with prostitution and the issues that arise from prostitution, have an opportunity to engage in the debate.
	We will be interested to hear views on ways of dealing with the issues arising from prostitution both nationally and internationally, through early prevention, through the application of civil and criminal remedies, and through the provision of support for those abused and exploited. We need to open up the debate on the best way to tackle these issues so that we can develop—for the very first time—a national strategy for prostitution.
	If I may say so, I think my noble friend was a little unkind in his assessment of the Government's attempt at reform. The new offences in the Sex Offences Bill on trafficking and the sexual exploitation of adults and children should make a significant contribution to protecting those women—and children—involved in prostitution by delivering them justice and protection through the prosecution of their exploiters. We are also bringing forward new powers to deal with anti-social behaviour.
	I understand the concern that enforcement of the law should not have unintended effects on the safety of those working on the streets, but we must also act to make our communities safe. The noble Lord referred specifically to the prohibition on carding. It was made an offence in response to considerable concern in communities where carding was common that not only was it distasteful and off-putting to residents and tourists alike but those placing the cards were extremely aggressive. I have seen no evidence that the ban on carding has driven prostitutes on to the street. Nor, in all honesty, would I expect that to be the case, when the advertising of sexual services takes place in the local press and, increasingly, through the Internet. Carding took place only in a limited number of cities.
	I wholeheartedly agree that enforcement activity must be balanced with support for the women involved in prostitution. There are many excellent projects around the country doing just that. The Home Office has funded 11 projects to look specifically at what works best as effective exit strategies. Those projects are being evaluated and will provide useful good practice guidance to practitioners. My noble friend suggested that we should also look rather further afield for inspiration. He gave us an instructive whistle-stop tour around the world, from Sweden via Europe to Australia and New Zealand. I found the examination of the situation in Edinburgh and Glasgow particularly instructive, although, of course, I would not necessarily agree with the comment made by the lady in Edinburgh.
	In each model one can see advantages and disadvantages. For each model, there are mixed accounts of how well it is succeeding in practice. It is a complex issue, and it is absolutely right that experience elsewhere should be examined in great detail. That forms part of the current scoping exercise. We must consider what kind of strategy is most likely to deliver the objectives that we all want to see: a reduction in the level of violence and exploitation experienced through involvement in prostitution; a reduction in the problems that the trade causes to local communities; and a reduction in the support that the trade inevitably provides for the drugs trade and other forms of organised crime, rightly highlighted by the noble Baroness, Lady Walmsley.
	A national strategy for prostitution must address early prevention to safeguard children who may be at risk of abuse through prostitution; protection and support for those drawn into prostitution; and justice through vigorous enforcement of the law against those who coerce, control and abuse those exploited through prostitution and against those who contribute to anti-social behaviour and neighbourhood degradation through activities associated with prostitution.
	We are working vigorously on the issue with our international partners. The noble Baroness, Lady Walmsley, referred to the White Paper Secure Borders, Safe Haven. Our response is to take a four-pronged approach to international matters: legislation; enforcement; and international co-operation to aid prevention and support victims. The scale of the problem is still unclear, as no reliable estimates exist. The Home Office research study Stopping Traffic, published in 2000, estimated that anywhere between 140 and 1,400 women were trafficked to the UK every year for the purpose of commercial sexual exploitation.
	I will also chair a ministerial group on sexual offences. It will be part of that group's remit to examine prostitution and trafficking issues. I assure the House that the ministerial team, working cross-departmentally, will put a lot of energy into addressing those important issues. I also understand the health issues, and those matters will continue to be of great importance to us.

House adjourned at twenty-one minutes before nine o'clock.